Global rivalries, corporate interests and Germany’s ‘National Industrial Strategy 2030’

This article asks how Germany could have pursued a far-reaching ‘National Industrial Strategy 2030’ despite the fierce opposition of German industry. To resolve this puzzle—which realist-inspired and institutionalist analyses struggle with—it deploys a critical state theory attuned to the uneven and combined development of global capitalism. The twin challenge of China catching up and the US forging ahead has not only prompted German officials to develop a ‘defensive-mercantilist’ response; new qualitative and quantitative evidence indicates that it has also deepened conflicts within Germany’s export industry. Small and large firms are divided over how to respond to the growing lead of US capital in the digital economy, and its major sectors have experienced Chinese inroads into high-tech manufacturing differently. I argue that the German state was/is able to advance its industrial strategy insofar as it reconciles these divergent interests. First, it has offered laxer EU cartel rules to big business and enhanced protection from digital oligopolies to the Mittelstand, in exchange for tighter foreign direct investment controls. And second, I suggest that it could win over the chemical and electrical industry, through selective state subsidies, to its plans to re-shore transnational value chains in the name of ‘technological sovereignty’.