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Denmark’s Diplomatic Ties with Asia · Diplomacy and International Relations

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  Welcome to Diplomacy and International Relations by
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  Bastian Freiburg. Today we're looking into how a
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  small European nation, Denmark, is actively, well, reshaping its
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  global footprint. It's been a pretty
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  sophisticated, calculated shift and how it engages with Asia
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  diplomatically and economically. Some sources are even calling it
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  a strategic renaissance. Our mission today is to unpack
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  how Denmark is positioning itself as this indispensable
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  partner, really focusing on green transition and innovation.
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  Exactly. And what we're examining here
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  is, you know, the high wire act of 21st century diplomacy.
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  How does a nation like Denmark chase mutual prosperity through
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  these really nuanced country specific deals across Asia while
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  at the same time navigating these huge geopolitical
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  tensions? I mean, especially the US China
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  rivalry and adapting to all the pressure from companies wanting
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  to de risk their supply chains. It's a, it's way more complex
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  than just trade talk. It's strategic integration, but
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  under serious pressure. It absolutely is complex indeed.
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  And before we dive into those choppy waters, just a quick
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  note, if you find this kind of analysis valuable, you can
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  OK, so let's look at Denmark score strategy in Asia.
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  It seems very focused. They sort of move beyond the old
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  school bilateral treaty approach, haven't they?
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  Now it's more about these sophisticated strategic
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  partnerships built on leveraging well what Denmark does best.
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  Right. The real strength of the
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  strategy is identifying this universal urgent need across
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  Asia, those developmental challenges around
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  sustainability, climate change, and matching that perfectly with
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  Danish expertise. They've made green tech and
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  sustainable development the main vehicles for pretty much every
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  engagement, so. Why is that approach
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  strategically, you know better for a smaller nation like
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  Denmark compared to just hammering out traditional trade
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  deals? Because it's a long game, it
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  goes way on just selling commodities.
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  Denmark is, let's face it, world renowned for renewables, water
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  management, sustainable cities. By focusing on the green
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  transition, they're not just selling products, they are
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  embedding Danish technical standards, Danish best practices
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  right into the core infrastructure of these other
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  economies. So I see, and that creates long
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  term market lock in. It ensures Danish companies
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  become the go to partners for decades.
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  It generates genuine win win scenarios.
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  And the numbers seem to back that up.
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  We're seeing total Asian trade volume for Denmark topping $22
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  billion in 2024. Exactly.
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  And to put that scale into perspective, that level of
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  financial integration gives Denmark a seat at the table
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  geopolitically, setting standards that, frankly, nations
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  twice its size often don't get. If they lack that specific
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  expertise, it really solidifies their role as a global player.
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  And yeah, diversification is key, but their core sectors are
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  still booming. Look at pharmaceuticals
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  globally, $21.8 billion in exports, strong performance.
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  The green strategy provides both the political cover and the
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  economic engine for this kind of expansion.
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  OK, so the green transition opens doors, but let's be
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  honest, all those doors lead into a huge room kind of
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  dominated by one massive force, China.
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  How does Denmark manage the risk?
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  I mean, China is its largest Asian trading partner.
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  The policy seems to be this sophisticated balancing act,
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  right diplomatic pragmatism mixed with this idea of de
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  risking. Well, the sheer scale of the
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  trade makes separating from China almost impossible right
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  now. It just does.
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  In 2024, bilateral trade hit what was it?
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  An unprecedented $15.46 billion. That's a big jump, 12.8%.
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  So China is still Denmark's largest Asian trading partner
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  even with all the rising tensions.
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  And this relationship, it has deep roots.
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  They're marking 75 years of diplomatic ties in 2025.
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  Plus, China just announced visa free travel for Danish citizens.
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  That's significant. The corporate world seems to be
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  pulling, or at least feeling pressure in the opposite
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  direction. That famous C + 1 strategy,
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  China plus one, where companies try to reduce dependency by
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  sourcing elsewhere. We've got some interesting data
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  here from ADI Sense China survey.
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  That's Danish industry. They pulled 85 companies.
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  Yeah, that survey paints a really nuanced picture.
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  On the one hand, 53% of companies still see China as
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  essential, essential to their global footprint.
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  But on the other hand, 49%, almost half, are actively
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  considering moving activities away, or they've actually
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  already started that process. And here's the really crucial
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  part for listeners. I think this shift isn't
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  primarily driven by the usual business metrics.
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  The survey found that things like rising costs in China or
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  even lower sales expectations there, those are mostly non
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  factors in the decision to, you know, cut back dependency.
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  It's a fascinating finding. Isn't it Almost
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  counterintuitive. The spreadsheet might say stay,
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  but the risk assessment is screaming move.
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  The really clear overriding factors are geopolitical
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  considerations, cited as significant by a huge 84% of
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  respondents, 84%, and the explicit need to diversify the
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  supply chain that was cited by 77%.
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  Geopolitics has basically taken over from traditional market
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  economics as the number one risk factor for investors.
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  It's like for the first time, the CFO is getting orders from
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  the security analyst, not the economist.
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  But then if we look at the really big Danish corporations,
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  quite a few seem to be adopting a counter strategy this in China
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  for China approach. How does that fit into a climate
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  of de risking? It seems contradictory, but it
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  makes a certain kind of sense. These large companies are
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  essentially trying to isolate their Chinese operations.
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  They focus only on capitalizing on that massive Chinese domestic
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  market. By producing in China for China,
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  they hope to shield those operations from external
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  geopolitical meddling and public opinion back home or elsewhere.
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  And crucially, they position themselves to fit into what
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  Beijing apparently calls the business class of solutions.
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  Business class? What exactly does that mean?
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  It refers to the really high end stuff, highly specialized tech,
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  critical components, advanced manufacturing expertise,
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  basically the exact inputs China needs for its own domestic
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  modernization goals like advanced manufacturing or
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  pharmaceuticals. By offering these critical high
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  value solutions, these firms make themselves indispensable,
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  or at least less dispensable to Beijing's own development plans.
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  That makes them relatively more immune to political pressure
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  compared to foreign companies that are just there to use China
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  as an export base. OK, so if C + 1 is becoming a
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  political or maybe a geopolitical necessity for many,
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  where are Danish companies actually looking to invest
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  instead? India seems to stand out as a
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  really successful example of this a green innovation
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  partnership model. Oh, absolutely.
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  The India partnership is, I think, profound because it's
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  been so strategically institutionalized.
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  It's not just talk. You've got the 2025 renewal of
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  the Energy Cooperation Memorandum, which aligns Denmark
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  directly with India's huge goal of net 0 by 2070.
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  And it's not just MO use. We see actual organizations
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  being set up like the Wind Alliance India that launched in
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  2023 and the Green Transition Alliance India planned for
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  20/25, right? And they're putting money behind
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  it too, like that bilateral hydrogen research project with
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  DKK 20 million in joint funding. Solid commitment, OK, While
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  diversification looks good on paper, you know, spreading the
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  risk, not having all your eggs in one basket, Is there actually
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  any evidence that markets like India can absorb the sheer scale
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  of manufacturing that China handles right now?
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  We know China's foreign trade volume is almost the same as
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  India and all of Southeast Asia put together.
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  Is this de risking strategy actually feasible economically
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  in the short term or is it just something companies feel they
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  have to do politically? That really is the core
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  challenge of C + 1, isn't it? It spreads the risk, yes, but it
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  doesn't easily replace the sheer capacity or the integrated
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  ecosystem China offers. But corporate sentiment, as
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  shown in that survey, suggests they feel they must try.
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  So where are they looking? Danish companies are looking
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  regionally towards Southeast Asia as the key alternative.
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  That was preferred by 33% and if you drill down to specific
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  countries, India came out at 23% and Vietnam at 19%.
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  Those are the top 2 preferred single country alternatives for
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  sourcing outside China. And beyond these major economic
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  partners, the advanced tech cooperation is also quite deep,
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  isn't it? Not just trade, but real
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  collaboration. Absolutely.
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  We're seeing long term very specialized tech collaboration.
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  Take the Japan Denmark cooperation that's focused
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  specifically on floating offshore wind technology.
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  It's helping Japan hit its massive target, 30 to 45
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  gigawatts by 2040. And similarly, the long running
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  South Korea Green Growth Alliance is heavily focused on
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  offshore wind and also hydrogen tech development.
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  These aren't just trade deals, they're partnerships built on
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  tech transfer and shared standards, which goes back to
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  that idea of embedding influence.
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  OK, let's zoom out a bit. All this economic strategy, this
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  green diplomacy, it's all playing out against a pretty
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  tense geopolitical backdrop. The Indo Pacific is clearly
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  emerging as the new economic center of gravity.
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  It's expected to generate, what, 2/3 of global economic growth by
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  2030? And with that level of economic
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  importance comes, well, an unavoidable security dimension.
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  It just does. Denmark, being a major seafaring
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  and trading nation, has a vital interest in secure maritime
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  trade routes. That's clearly reflected in
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  their global strategy for Maritime Security for
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  20/25/2020. 8 And their security footprint there is expanding in
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  a very real way. I mean, the decision to appoint
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  a Danish staff officer to the US Pacific Command Indo Pacom
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  starting in 2025, that shows a clear commitment, doesn't it?
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  Expanding Denmark's security presence right in the region?
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  It does, but that action immediately highlights the core
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  strategic dilemma for Denmark. Their commitment to NATO and the
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  EU is absolutely central, right? Yet their key allies within
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  Europe have starkly different approaches to the whole US China
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  rivalry. How does that difference look in
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  practice? Can you give an example?
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  Sure. The UK for instance, aligns very
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  closely with the US view. Maintaining the American LED
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  global order is paramount. Now contrast that with say,
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  Germany and France, the continental heavyweights.
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  They tend to view this deepening US China confrontation as deeply
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  destabilizing. Their priority is more about
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  establishing A unified, independent European position,
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  keeping some distance from both superpowers.
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  France especially really emphasizes strategic autonomy.
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  They use things like arms exports, for example, to build
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  partnerships that aren't necessarily tied to US
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  influence. Right, so this is where that
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  policy tightrope walk really starts.
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  If the US asked Denmark to send shifts to join a big military
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  exercise in the Indo Pacific, that decision immediately puts
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  Denmark potentially at odds with the strategic priorities of
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  Paris and Berlin, who might prefer Europe stays out of
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  direct US operations there. Exactly.
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  It creates this really difficult internal contradiction for
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  Danish defense and security policy.
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  They're constantly forced into these tricky decisions about
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  military participation in the Indo Pacific.
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  And these decisions risked undermining unity with key
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  European partners like Germany and France, even while they all
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  share the same broad strategic goal of economic prosperity and
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  stability. It's a tough spot.
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  Hashtag tag outro So to synthesize Denmark's deep focus
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  on green diplomacy, it really provides a highly pragmatic,
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  quite sophisticated model for how a smaller state can maintain
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  global influence. By aligning their unique
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  expertise and sustainability directly with Asia's biggest
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  needs, they've managed to secure a resilient economic foothold
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  and, frankly, a critical seat at the table, even as the risks
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  from great power competition just keep intensifying.
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  But that challenge we touched on earlier, it still persists,
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  doesn't it? Despite this clear push from
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  companies towards C + 1 and diversification, we have to
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  remember that India, for example, realistically lags
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  maybe 1520 years behind China on key things like massive scale
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  Expo capacity. Which brings us to a final
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  provocative thought for you to chew on.
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  Can these C + 1 markets truly absorb the necessary investment,
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  the sheer manufacturing scale in the short term to fundamentally
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  reduce global dependency on China?
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  Or is the volume challenge just so immense that the complexity
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  of operating globally is ironically only increasing for
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  everyone? That's going to be a fascinating
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  test case for a global business and diplomacy over the next
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  decade. Absolutely.
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  India will well, thank you for joining us for this look into
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  Denmark strategic balancing act in Asia.
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  If you enjoyed our conversation today, please do follow the
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  people. We'll catch you on the next deep
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  dive.