Splits in the German Capitalist Class: Reflections on the World Inter-Imperialist Rivalry Between the USA and China

By: Red Phoenix Correspondent International, Hari Kumar

Last year in discussing Merkel’s retirement, I wrote that:

“In the dynamic of 21st century capitalism, under Merkel Germany has tried to ride several horses. But the increasingly tense race between USA and Chinese imperialism, will likely force Merkel’s heirs to be clearer about opposing US imperialism.” (Berlin Left Blog, July 25, 2021)

Since the Russian neo-imperialist attack on Ukraine, the confrontation between USA imperialism and the bloc of Chinese-Russian imperialism has split the German capitalist class. That class which is at the center of the EU is pivotal for the USA to influence, or should we say to ‘control.’ We highlight three particular instances where this division became evident below.

The overall context of this dis-union of the German capitalists is the rapidly evolving inter-imperialist rivalry that is becoming more and more overt. Here the forces of the USA, including NATO, are pitted against those forces allied to China and Russia. The states making up the so-called BRICS coalition have not fully revealed themselves as yet, but are likely to be joining that faction headed by China.

The two opposed blocs in German capitalism are quite clear – one led by the Greens (in particular, Federal Economics Minister Robert Habeck and Minister for Foreign Affairs Annalena Baerbock) and the Free Democratic Party (FDP) – favor a more overt partnership with (or subservience to) American imperialism. This means burning bridges with China. This bloc also aims to tie the EU to the USA apron strings. Opposing them is the majority of the Social Democratic Party (SDP), led by Chancellor Olaf Scholz, who wish to maintain economic links with China. This would enable markets for German capital and ultimately to maintain an independence from the demands of USA imperialism.

This battle between the two blocs unfolded during the Russian imperialist war against Ukraine. The blocs take according positions on this war. The more bellicose Greens wish to ramp up further sending of war materials to Ukraine. In contrast, the SPD tries to adopt a more ‘cautious’ policy, while acquiescing in military build-up and verbally condemning Russia. But the war aspects of this would need a separate discussion. Here we focus only on specific recent events.

The Nord Stream Affair – Mysterious explosions in the North Sea

On September 26, 2022, a series of explosions hit the Nord Stream pipelines – both 1 and 2 – crossing the Baltic Sea, which led to major leaks of the natural gas. More importantly they blew holes that allowed salt water to enter, destroying any potential for them to be ever used.  These pipelines were majority owned by the Russian state company Gazprom. A map of the pipeline course and a blow-by-blow dating is in Der Spiegel.

This happened in the territorial waters of Sweden and Denmark, near the island of Bornholm. These countries wrote to the UN that “several hundred kilograms” of explosives had damaged the pipes. All observers suspect a deliberate intentional sabotage. However, while Denmark, Sweden, and Germany have launched investigations, these are fractured and separate. Sweden refused a joint investigation as the matter was “too sensitive.”

These countries refuse to discuss reports of recent USA and NATO warcraft activity near Bornholm. Yet between August to September, a US fleet – “the largest US naval battle group since the cold war ended” – was cruising through the Baltic Sea, and the USS Kearsage reconnoitered around Bornholm.

Three plausible perpetrators are implicated:

“Was it the Russians trying to rattle the West, the Americans trying to sever a Russian economic artery or possibly the Ukrainians trying to take revenge on Russia? — what is known remains (as) cloudy.”

But the ‘Baltic Pipe’ – carrying Norwegian gas to Poland – was unaffected. Had Russia been involved, damage to this pipe would have been much more likely. As for the Ukrainian hypothesis, this would only further exacerbate potential European gas shortage, and would be unlikely to endear Ukraine to its European allies. It seems far more plausible that the USA was responsible.

On the other hand, the USA had long argued vehemently against the Nord Stream pipelines. The German government enabled the deal with Russia under Chancellor Merkel. It was with considerable reluctance that the USA appeared to acquiesce.  Therefore a natural question, as Der Spiegel puts it, is: “Did the USA, as immediately discussed in many voices on Twitter, kill the pipeline project, which has always been unloved?”

The very probable USA ownership of the sabotage is shown by the following. Firstly, as reported by Der Spiegel on September 27th:

“The U.S. Central Intelligence Agency (CIA) had weeks ago warned Germany about possible attacks on gas pipelines in the Baltic Sea… The German government received the CIA tip in summer, Spiegel reported.”

Secondly, three very open statements – of US President Joe Biden; his top State Department official Victoria Nuland, before the explosions; and those of his Secretary of State Antony Blinken, after the explosion – leave little room for doubt.

On February 8, 2022, Biden threatened to “bring an end” to the Nord Stream pipelines “if Russia invades.” Victoria Nuland echoed those remarks.

As Russia formally launched the war, it began limiting energy flow via the older Nord Stream 1, forcing immediate energy crunches on Europe. Oil and gas industrialists in the USA exulted as their profits soared.

Immediately after the mysterious explosions, the smug Blinken posed as the savior of Europe, saying “it’s a tremendous opportunity” – or, in full:

“We’ve significantly increased our production as well as making available to Europe liquefied natural gas. And we’re now the leading supplier of LNG to Europe … We’ve worked to release oil from our Strategic Petroleum Reserve to make sure as well that there is oil on the markets and to help keep prices down….Ultimately this is also a tremendous opportunity. It’s a tremendous opportunity to once and for all remove the dependence on Russian energy …That’s very significant and that offers tremendous strategic opportunity for the years to come.”                                                          

“The U.S. Secretary of State, Antony Blinken, did not accuse Russia and instead said it was in “no one’s interest” to destroy Nord Stream 1 and 2. “The United States and NATO/EU seem remarkably relaxed about sabotage of a piece of critical infrastructure,” reported an oil and gas reporter for Reuters. “NS 1 and 2 were not delivering gas. But there is an important precedent/principle. Lack of high-profile response from Washington, London and Brussels itself an important story.”

Finally, Europeans in the know are well aware of the real identity of the saboteurs. Radek Sikorski, Polish European MP and former Polish Defense Minister and Deputy Minister of Foreign Affairs, blurted out a tweet which has since been deleted:

“An on-line debate erupted between senior Polish officials over who is responsible for the destruction… Sikorski, attributed to the United States the sabotage. ‘Thank you, USA,’ Sikorski wrote on Twitter.”

Recently, President Putin of Russia again dangled the carrot of re-opening the supply of gas through the Nord Stream 2 pipeline, which was finished last year at a cost of $11 billion USD.

“Mr. Putin told an energy conference in Russia that delivering natural gas to Europe through the remaining strand of Nord Stream 2 would be a matter of “just turning on the tap.”

But that is unlikely. Warfare now includes the sensitive sea beds of the world, where the “US Senate’s failure to ratify the UN Convention on the Law of the Sea” – gives it free rein.

German company expansions in China versus the USA – both blocs moving to deindustrialize their German base

There are two separate groups of industrialists in Germany, mirrored by their political representatives. The two opposing directions being pursued are either pro-China or pro-USA. Ultimately, both blocs propose moving production in significant measure to either China or to the USA. For example, the CEO of BASF Germany, Martin Brudermuller, confirmed:

“BASF Germany … recently announced that it was intending to ‘downsize permanently’ in Europe, with high energy costs making the region increasingly uncompetitive. The statement from the world’s largest chemicals group by revenue came after it opened the first part of its new €10bn plastics engineering facility in China a month ago, which it said would support growing demand in the country. ‘The European chemical market has been growing only weakly for about a decade [and] the significant increase in natural gas and power prices over the course of this year is putting pressure on chemical value chains.’ “

Olaf Scholz made his position clear in an opinion piece for “Frankfurter Allgemeine Zeitung” on the eve of leading a major business delegation to China. Scholz rejected any “decoupling” of relations with China. The business trip was continually undermined by loud criticism from the Green-FDP elements of the Ampel Coalition. But Scholz’s position reflects a dominant strand in German capital, which wants access to the large market of China. In recent years this has expanded:

“In the first half of 2022, German companies’ direct investment in China hit a record high, surpassing … tens of billions of euros, according to … the German Institute for Economic Research (DIW Berlin)… This is proved by intensive investments by German enterprises in China. …BASF inaugurated the first plant… on September 6 in South China’s Guangdong Province… German auto parts manufacturer Hella announced in July that it will expand capacity in China and open a new lighting plant in Changzhou.. Robert Bosch Venture Capital GmbH, a subsidiary of Bosch Group, announced in June that it will set up a new fund of 250 million euros for start-ups in China.”

Meanwhile the opposing, and thus far smaller, pole of German capital plans branch plants in the USA, tempted by investment funds and the lure of cheap energy:

“German companies are expanding their presence in the United States – at the growing expense of production sites in Germany. (Because of – HK) huge investment programs in the USA… economic stimulus measures, some in the triple-digit billions, to induce German companies to set up production sites in the United States… (for example -ed.) the Northvolt company is considering suspending its plans to build a battery factory in northern Germany and instead to build a plant in North America. At the same time, the existence of energy-intensive industries is being jeopardized in Germany… The threat of their relocation abroad – particularly to the USA, where energy prices are significantly lower – is tangible.”

The pro-USA wing of German capital tries to obstruct ties of German capital with Chinese capital

Meanwhile ‘Green’ Habeck tries to obstruct pro-Chinese moves of German capital:

“Habeck’s economy ministry refused to extend Volkswagen’s investment guarantees for China, citing the repression of Muslim Uyghurs in the western region of Xinjiang. The ministry is now working on plans to cap the number of such guarantees for China.”

The pro-USA camp tried blocking China’s acquisition of port facilities in Hamburg. Of course this is where Scholz hails from, politically speaking.

“The Chinese shipping company COSCO’s acquisition of a stake in a terminal in the port of Hamburg, agreed upon last year, was approved last week only with certain restrictions. Federal ministers from the FDP and Greens had done their best to prevent it.”

In the event, Habeck was only able to reduce the acquisition of the stake to a minority position. But this itself was welcomed by the USA.

Moreover in the strategically important sector of semi-conductors and chips, initially it seemed as if the German firm Elmos, which produces chips, was to be taken over by a Swedish company, Silex, which is owned by Chinese semiconductor group Sai Microelectronics. While formerly apparently approved, now Habeck has vetoed it.


Marxist-Leninists do not weep for either factional bloc of German capital. However we do argue that this is the prelude to the coming inter-imperialist war. While this may still be years off, all of these maneuvers are intensifying. Only a genuine workers’ party, in as many of the countries driving the re-division of the world, will help. By workers’ parties of course we mean Marxist-Leninist parties. Those parties masquerading as “Green” or as “Social-Democrat Socialists” – or indeed those parties masquerading as “Marxist-Leninist” as in China – are simply covers for differing sections of imperialists.

Categories: International

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