Berlin, Munich, Dusseldorf Chancellor Olaf Scholz’s trip to China is a delicate mission. Experts and politicians had criticized the timing of the visit in particular, and Brussels and Paris were not happy either.
Because it was less than two weeks ago that China’s head of state and party leader Xi Jinping further expanded his power in a historically unique way at the Communist Party (CP) congress. “In such a situation, a visit by the German chancellor will be staged by China as an endorsement for Xi’s government,” warned Mikko Huotari, director of Berlin-based China think tank Merics.
Scholz will meet President Xi on Friday – as the first Western head of government since his re-election as party leader, as well as Prime Minister Li Keqiang. A twelve-strong business delegation accompanies the chancellor. Compared to previous trips by the then Chancellor Angela Merkel, it is a significantly smaller delegation. The business representatives should give weight to the arguments of the federal government, it was said in government circles.
The European business community operating in China welcomed the trip. “I think it’s very good that Chancellor Scholz is coming,” said Jörg Wuttke, President of the European Chamber of Commerce in Beijing and who has been familiar with China for many years.
Top jobs of the day
Find the best jobs now and
be notified by email.
“We haven’t had a G7 head of government or head of state in China for 1,000 days,” said Wuttke. “We absolutely need a clear language in this echo chamber, which has developed here since the pandemic.” The Chancellor had to speak plain language, he demanded.
>> Read here: Xi Jinping cements his power beyond his third term
In a guest article in the “Frankfurter Allgemeine Zeitung”, Scholz listed what he saw as the most pressing economic problems. According to the Federal Chancellor, it is taken very seriously that China’s economic strategy is aimed at strengthening the domestic Chinese market and using Chinese technologies in order to “intensify the dependence of international production chains on China”.
Scholz: Germany wants to reduce one-sided dependencies
Germany will therefore reduce one-sided dependencies. However, according to Scholz, China, Germany and Europe benefited equally from “a large part of the trade between Germany and China”. Where risky dependencies have arisen – for example with important raw materials such as some rare earths or with certain future technologies – German companies are now “rightly” expanding their supply chains.
Scholz still sees problems with market access for German companies in China, with licenses, with the protection of intellectual property or with questions of legal certainty. In fact, the local German economy has been complaining for years that in individual cases there has been progress in opening up the market. However, according to the criticism, too little is changing structurally.
As the Handelsblatt reported last week, the twelve-strong business delegation includes representatives of the pharmaceutical company Biontech, the car manufacturers BMW and VW and Siemens boss Roland Busch, who is also chairman of the Asia-Pacific Committee of German Business (APA).
>> Read here: A representative from Biontech is also traveling to China with Scholz – that is the complete list of companies
A signing of contracts and declarations of intent in the presence of high politics is not expected. These used to be part of the standard program for chancellor trips to the People’s Republic.
China will also not be able to announce the participation of the Chinese state-owned company Cosco in a terminal in the Port of Hamburg (HHLA) as a sign of success for Chinese-German cooperation. Shortly before Scholz’s trip to the People’s Republic, the federal government had forbidden a 35 percent stake and only allowed a stake of less than 25 percent, subject to conditions. Greens and FDP were completely against the deal; Scholz had campaigned for him to go through.
Contrary to media reports to the contrary, according to information from the Handelsblatt, HHLA circles are still negotiating the final terms of the entry with Cosco. The most important point of contention: While the federal government is assuming that the Chinese will take a purely financial stake in the operator of the container terminal in Tollerort, this has so far not been enough for the state-owned shipping group. It is therefore not yet certain whether an agreement will be reached, according to negotiating circles.
Relief that there is a meeting at all
During Chancellor Scholz’s trip to China, the German side is already satisfied that face-to-face talks are taking place again in these difficult times. It is important “to talk to partners like China,” said BMW CFO Nicolas Peter before the trip. “On the one hand, from our point of view, cooperation with China is absolutely essential in order to implement important political projects.” For the Green Deal, the energy transition, China is not a risk, but an opportunity. According to Peter, China will also be an important driver for electromobility.
Volkswagen CEO Oliver Blume, who was traveling with him, said that every opportunity for communication between the two countries should be used. He wanted to listen to “ideas and perspectives” on site. Because of the corona pandemic, there have been no direct encounters for almost three years. In view of the completely changed geopolitical and global economic situation, Beijing offers the opportunity for a personal exchange of views.
China insists on strict corona rules
The president of the industry association BDI, Siegfried Russwurm, is not there. During the last visit of former Chancellor Angela Merkel to China in 2019, the then BDI President Dieter Kempf was still there. Before the trip, the BDI boss appealed to Scholz that Germany should make itself more independent of the People’s Republic. “We have to break down one-sided dependencies quickly,” says Russwurm.
It will not be an easy trip for the business delegation due to the strict corona rules. First of all, all passengers have to undergo a corona test by the Chinese authorities immediately after landing in Beijing and wait for the result individually in a room in a state guest house. If it is negative, they are allowed to leave the room again.
During the rest of the day, travelers are only allowed to move in very limited zones – Beijing had already practiced this method of “bubbles” during the Olympic Games to prevent infection. Anyone who comes into contact with the delegation from Germany must then be in quarantine for at least ten days, seven of them in a central facility.
More: Siemens wants to massively expand business in China – and risks new dependency.