On Friday, November 4th, German Chancellor Olaf Scholz concluded his one-day China visit. While he left its purpose open to interpretation, doing business was at the forefront of Scholz’s mind, as an accompanying delegation of German business leaders attested to. Back home, however, the visit had stirred the pot.
Scholz’s China trip, the first by a G7 leader since the start of the COVID-19 pandemic and since President Xi Jinping’s started his third term as Communist Party general secretary, has come under scrutiny by some in his ruling coalition.
In German politics, Scholz’s visit is more controversial than almost any other trip to China by a chancellor before. Scholz had already incurred heavy criticism over having congratulated Xi Jinping on his reelection, announced during China’s 20th Communist Party Congress. He was accused of playing right into Chinese propaganda. Scholz’s visit, then, was equally cast in that unfavourable light.
In addition, some German politicians sense that Scholz (SPD) is not appreciative enough of the risk involved in seeking a closer relationship with China; they are calling for Germany’s current China policy to be drastically re-imagined, as they warn that Germany—in a repeat of its mistake with Russia—could become overly dependent on the economic, and increasingly assertive, giant.
The day before his visit, Scholz published an op-ed piece in which he sought to assuage such worries. Noting that “the outcome of the Communist Party Congress that just concluded is unambiguous,” as “avowals of Marxism-Leninism now take up a much broader space than in the conclusions of previous congresses.” He defended his policy of not decoupling from China and voiced caution toward becoming overly reliant. However, China, “with its 1.4 billion inhabitants and its economic power will, of course, play a key role on the world stage in the future,” he noted.
The matter elicits much discourse in German politics. As reported by Der Welt, Finance Minister Christian Lindner (FDP) is calling for a new strategic vision. In an interview with Welt am Sonntag, he said that, whilst dealing with the People’s Republic [of China], “what is allowed to Germans while in China must also be allowed to Chinese while in Germany.”
Future trade and economic relations, therefore, must be based on the principle of reciprocity. Furthermore, Germany must retain the sense that China is not only a country to trade with, but also a systemic rival. “That is why we have to protect our critical infrastructure and our intellectual property,” Lindner said.
Yet, he did not mean that Germany should lower its trade with China, as it is “a gigantic domestic market where our premium products are sold,” and trade relations must be maintained. He did, however, make sure to note that in the long run, German companies would need to consider other world regions, such as North and South America and Africa.
Leader of the Greens, Ricarda Lang, is saying similar things. In her view, she urged Germany to regain strategic sovereignty over Beijing and be strategic in shaping its industrial policy. Clarifying her position, she said that Germany has “to define certain areas which we keep China out of,” while ensuring that Germany does not let its manufacturing peter out.
While she did not elaborate on the point, the “certain areas” where China’s presence needs curtailing was a likely reference to the recent Hamburg port affair. Cosco, a state-owned Chinese company, sought a controlling stake in the Tollerort container terminal (one of three), operated by HHLA in the port of Hamburg, which is Germany’s largest.
After the U.S. (which does pursue a policy of decoupling from China) intervened over Scholz’s party’s willingness to allow it, the German government eventually allowed Cosco only a maximum of 24.9% of its shares, instead of 35%. The deal, even with the reduced percentage, was heavily protested by two of Scholz’s coalition partners (out of three): the Greens and the liberal FDP.
Shortly before Scholz’s trip to China, the CEO of the Hamburg port operator HHLA, Angela Titzrath, defended that initial deal. “In order to survive in a competitive global market, we have to bind shipping companies like Cosco to us permanently,” she said. “The formation of blocs and isolation do not help us,” she went on, adding that “the current bashing of China is of no use to anyone and snubs many entrepreneurs with whom we have done reliable business for decades.”
Along with Ricarda Lang—who criticized Scholz for not having “representatives of civil society and human rights experts (in light of human rights abuses against China’s Muslim minority in Xinjiang)” alongside business representatives—her fellow Green, German Foreign Minister Annalena Baerbock, earlier this week called on Scholz to be tough on China and foreground the importance of human rights, international law, and fair competition.
During a visit to Uzbekistan, Baerbock emphasised that while they “clearly stated in the coalition agreement that China is our partner on global issues, and that we cannot decouple in a globalised world, China is also a competitor and increasingly a systemic rival.” As such, she went on, “we will base our China policy on this strategic understanding and also align our cooperation with other regions in the world.”
Judging by the outcome of his visit, which he defended by saying “it is good and right that I am here in Beijing today,” Scholz managed to extract a few ‘wins’ so he could put some of his coalition partners at ease. For one, both countries agreed to further cooperation on climate change and disease prevention.
Yet, Scholz was especially proud that Xi—given the fact that China is a major strategic partner of Russia—expressed to him a desire for peace in Ukraine while opposing both the use of, and the threat to use, nuclear weapons.
“We have agreed that threatening nuclear attacks is irresponsible and dangerous,” Scholz told reporters, while relaying that he had stressed to Xi “the importance for China to exert its influence on Russia.” As it has UN veto power, China has a responsibility to help bring the war to an end, he added.
In regards to Taiwan, the island which China regards as a breakaway province, and over which the Taiwan Strait had seen much military activity as of late, Scholz said that “any change to the status quo can only take place through mutual agreement and peacefully,” hereby reiterating the EU’s One-China policy. He also urged Beijing to protect the rights of the Muslim Uyghurs.
Scholz went on to express disapproval of Beijing’s sanctioning of Lithuania, after the Baltic country chose to pursue closer ties with Taiwan: “It is also important to be clear: Economic measures against individual EU member states are directed against the entire EU internal market, and sanctions against EU parliamentarians are also unacceptable to us,” he said.
One (for the moment, minor) trade deal was struck on the spot. Expatriates—not local Chinese people, though this was discussed as a future possibility—can now soon take German BioNTech coronavirus vaccine shots in China.
Apart from that, nothing concrete in terms of new trade deals or investments—though the presence of BASF, Volkswagen, and Siemens suggests these might soon follow—was announced.
Scholz did call for fairness in trade relations, however. German companies should not be disadvantaged in the Chinese market.
Premier Li told reporters that China continues to be prepared “to assist Germany in accessing our market,” as he called for a “sound and stable” relationship with Germany. “We support a multipolar world, free trade, and want to meet our partner on an equal footing,” he concluded.
EU allies, such as France, have advocated a joint-EU approach for confronting Beijing on its unfair practices. Late last month, French President Emmanuel Macron proposed that he and Scholz should travel jointly to China so that Xi cannot play European countries off against each other through economic means. Scholz however chose to reject his French counterpart’s proposal.