Worries over Germany’s China dependency overshadow Scholz trip

  • Scholz is the first G7 leader to visit China since the start of the pandemic
  • Germany is developing a new, tougher Chinese strategy
  • Hawks fear Scholz will keep economic ties a priority
  • The business delegation to accompany the chancellor to Beijing on November 4

BERLIN, Nov 2 (Reuters) – Chancellor Olaf Scholz makes an inaugural visit to China on Friday that will be closely watched for clues about how serious Germany is about reducing its economic dependence on Asia’s rising superpower and tackling the its communist leadership.

His one-day visit on November 4 will make Scholz the first G7 leader to visit China since the start of the COVID-19 pandemic and the first to meet Chinese President Xi Jinping since he consolidated his seizure of power at a Communist Party Congress. .

Deep trade ties link the largest economies in Asia and Europe, with rapid Chinese expansion and demand for Germany’s cars and machinery fueling its own growth over the past two decades. China became Germany’s largest trading partner in 2016.

A recent survey by the Ifo think-tank found that almost half of German industrial companies now rely on significant inputs from China.

But Scholz’s trip comes at a time of growing concern in the West — particularly in Germany’s top security ally, the United States — about China’s trade practices, human rights record and territorial ambitions.

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It also comes amid concern at home about Germany’s dependence on another increasingly assertive and authoritarian state given the ongoing fallout from its over-reliance on Russian energy.

“It is extremely important that we never again become so dependent on a country that does not share our values,” Foreign Minister Annalena Baerbock told ARD broadcaster when asked about China.

Scholz, who will meet with Chinese Premier Li Keqiang and Xi, will press China to open its markets, raise human rights concerns and discuss “autocratic” tendencies, a German government spokesman said last week .

He also hopes that China can help persuade Russia to end the war in Ukraine, a government official said on Wednesday.

“This trip is an exploratory trip to find out in personal exchange where China is, where China is going and what forms of cooperation are possible,” the official said.

Germany had already begun to take a slightly more dovish stance on China under former Chancellor Angela Merkel, for example by sending a warship into the disputed South China Sea for the first time in two decades last year

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Now Scholz’s government is drawing up its first strategy in China, on the basis of a coalition agreement that has taken a tougher stance on Beijing, focusing on sensitive issues such as Taiwan and Hong Kong and human rights violations. in Xianjiang.

The chancellor made his maiden visit to Asia in Japan, not China, unlike his predecessor in a sign of changing times.

MERCHANT APPROACH?

Still, some coalition members, European officials and rights activists worry there are early signs that Scholz, who has warned against decoupling, will not mark a decisive break with what they see as Merkel’s mercantilist approach towards China.

Reuters graphic

Scholz will be accompanied by a delegation of business leaders including the heads of Volkswagen ( VOWG_p.DE ), BASF ( BASFn.DE ), Siemens ( SIEGn.DE ), Deutsche Bank ( DBKGn.DE ), BMW ( BMWG.DE ), Merck (MRCG.DE) and BioNTech, according to sources familiar with the matter.

No business dealings with the company were planned, a German government official said.

However, “their decision to bring a trade delegation shows that, for Germany, profit continues to trump human rights,” Dolkun Isa, president of the Munich-based group, the World Uyghhur Congress, said on Wednesday, arguing that Scholz ignored a genocide. occurred in the Xinjiang region.

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Beijing denies any abuse there.

Last week, the German chancellor also promised a cabinet decision to allow China’s Cosco to invest in a terminal in the port of Hamburg despite push from its coalition partners.

Reuters graphic

Scholz’s junior coalition partners, the Greens and Free Democrats (FDP), have long been tougher on China than his Social Democrats (SPD) and Cosco’s decision sparked an outcry.

FDP Secretary General Bijan Djir-Sarai called the decision “naive” and criticized the timing of Scholz’s trip to China as “deeply unfortunate.”

In addition, French and German government sources told Reuters that French President Emmanuel Macron had suggested that Scholz go together to Beijing to send a signal of EU unity to Beijing and counter what they see as attempts Chinese to play one country over another.

But the German chancellor rejected Macron’s offer, the sources said.

EU countries must adopt a more united approach, the European Union’s industry chief told Reuters on Monday.

Reporting by Sarah Marsh and Andreas Rinke; Additional reporting by Paul Carrel; Edited by Alexandra Hudson

Our standards: Thomson Reuters’ principles of trust.

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