Scholz is the first representative of a liberal democracy to be granted a state visit to China since the outbreak of the coronavirus pandemic in Wuhan in 2019 and will be the first major political leader to meet Xi Jinping since the Chinese president took power. of overthrowing the top of the Communist Party. He will make a one-day visit to Beijing on Friday as a representative of a government that has vowed to turn the page from the Angela Merkel era, when Germany pushed for closer economic cooperation in the wake of the 2008 financial crisis and cemented its relationship over 12 state visits. in China in Merkel’s 16-year tenure. Germany’s current three-party coalition government, by contrast, has announced its intention to reduce its economic dependence and strengthen relations with Asian democracies. In the coalition agreement signed late last year, it described its relationship with China as a “systemic rivalry” and emphasized the need to address “geopolitical and political security issues together with the United States and critical Indo-Pacific partners such as Japan. , Australia and India’. Such noises of China skepticism are echoed by Germany’s intelligence community, with the head of its domestic spy agency warning at a recent parliamentary hearing that China posed a greater threat than Russia. “If Russia is a storm, China is climate change,” said Thomas Haldenwang. Unlike his predecessors Merkel and Gerhard Schroeder, Scholz in April made Tokyo, not Beijing, the destination of his first official trip to Asia. The Allies argued at the time that it symbolized a reassessment of Germany’s geopolitical priorities. Olaf Scholz with the Japanese Prime Minister, Fumio Kishida, in Tokyo in April. Photo: Getty Images In an article published in the Frankfurter Allgemeine Zeitung on Wednesday, Scholz said China is more concerned with issues related to national autonomy and security. “If China changes, so must our relations with China,” he wrote. But so far, the chancellor has given little indication of what this reassessment will mean in practice. Worse, there are fears that the revaluation has been reassessed yet again. Last week, Scholz’s chancellery pushed through a deal allowing Chinese state-owned shipping company Cosco to buy a 24.9 percent stake in three terminals in Germany’s biggest port, Hamburg, against strong criticism from its coalition partners. Greens and the liberal party. This week, Scholz will travel east, as Merkel used to, with a delegation of CEOs in tow. They represent, among others, chemical company BASF and carmakers Volkswagen and BMW – the three companies that dominated European investment in the Chinese market last year, even as other business sectors on the continent became more wary of pouring money into the country. “The decision to travel to Beijing with a delegation of industry leaders is problematic,” said Noah Barkin, an expert on Sino-German relations at US research firm Rhodium Group. “It’s hard to send tough messages about Russia, Taiwan and human rights when your CEOs are sitting in the next room wanting to talk about investment.” He added: “It is understandable that Merkel remained on a policy of engagement with China at the end of her term. It is less understandable that Scholz is returning to this strategy after less than a year in office.” Xi Jinping and Angela Merkel at the chancellery in Berlin in 2014. Photo: Markus Schreiber/AP One explanation is that Germany’s government, whose tripartite stakeholder structure makes the slow task of consensus-building more essential than ever, is still uncertain about exactly what its China strategy will be. At a recent foreign policy debate in Berlin, Scholz’s chief of staff, Wolfgang Schmidt, expressed deep skepticism about the idea “that we should disengage” from China. “Yes, there is a risk that China will do it,” he said. “But that will impoverish the whole world, including China.” A straw man argument, critics say, since no political figure in the West has advocated a complete severance of economic ties with China since the end of Donald Trump’s term in the White House. “Systemic competition” may be written into Scholz’s coalition agreement, but how deep that competition will go has yet to be fully discussed. “Does ‘systemic competition’ refer only to a conflict in the geopolitical arena, or is it a competition between fundamentally opposing political and economic beliefs?” asked Tim Rühlig, China expert at the German Council on Foreign Relations (DGAP). “I suspect Scholz’s team in the chancellery is still trying to figure it out.” With the German government facing a populist backlash over rising energy bills this winter and business associations nervous about gas rationing scenarios, it may seem wise for Scholz to bide his time. Reversing decades of military and energy policy is already such a costly and politically risky undertaking that Germany’s leaders will be tempted to let the China issue hang for a while longer. Scholz wrote in his op-ed this week that the painful experience of the Cold War meant his country had no interest in global power structures coalescing again around two blocs. Ships unload at the port of Hamburg. Photo: Axel Heimken/AFP/Getty Images Rühlig said: “There is an argument that the fallout from the Ukraine war is already putting a lot of existential pressure on the German economy and that the chancellor’s focus for now should be on keeping the ship on course. If that is the view, then it might make sense to continue doing some deals like the Hamburg port terminal.” Scholz’s allies point out that under the Cosco deal, the Chinese company would get a smaller stake than previously discussed, a few terminals rather than the entire port, and with the investor barred from gaining veto rights over strategic business decisions. “But the key question for Scholz is how long until there is a major military conflict involving China,” Rühlig said. “Personally, I think an escalation of the situation in Taiwan within the next five years is not that unlikely.” An escalation of tensions between Beijing and the West, potentially leading to sanctions on European companies operating in China, would not only hit the German car and chemical industries. Goods worth 246.1 billion euros were traded between Germany and China in 2021, making China the most important trading partner of Europe’s largest economy for the sixth consecutive year. But with China accounting for only about 8% of German goods sent abroad, its dependence on exports is no greater than that of Japan, China or the US. However, for the raw materials that are key to the digital economy and renewable energy technologies, Germany and the rest of Europe are still heavily dependent on China’s ability to mine magnesium, rare earths and bismuth or refine lithium; manganese and nickel. A Chinese invasion of Taiwan could derail German plans to expand into electric cars, wind and solar farms. With such a scenario in mind, analysts like Rühlig say that reducing Germany’s strategic vulnerabilities in China should be extremely urgent. “You may be able to wean yourself off Russian energy within two winters,” Rühlig said. “Opening new mines to discover raw materials that we currently get from China takes a decade.”
