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Merkel heads to China amid growing trade tensions

May 23, 2018

German Chancellor Angela Merkel is en route to Beijing to discuss a number of issues with her Chinese counterpart. These will range from the rule of law to international disputes - especially with regard to trade.

Deutschland G20 Begrüßung der Teilnehmer durch Merkel
Image: Reuters/K. Pfaffenbach

Merkel visits Xi Jinping

Chancellor Angela Merkel is due to spend her first day in Beijing on Thursday, holding talks with President Xi Jinping as well as Premier of the State Council Li Keqiang.

On Friday, the Chancellor will continue her trip in Szenzhen in the south of the country just outside Hong Kong.

Merkel is accompanied by a business delegation from Germany, including the heads of two major German firms, Volkswagen and Siemens.

During her first visit to China since forming the new government this year after last September's elections, Merkel hopes to discuss trade issues as much as human rights.

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'Made in China'

Merkel is not expected to sign any major agreements while in China but rather tackle the trade tensions not only between the United States and China, but also issues that German business leaders have lately been facing when dealing with Chinese companies.

Trade between Germany and China reached a record high in 2017, making German companies Europe's largest investors in China. But this economic success has largely been overshadowed by a number of growing concerns in recent months: German businesses fear they might be squeezed out as China reaches higher levels of expertise — without always playing by the rules and respecting intellectual property rights.

"China and Germany stand by the rules of the WTO; however, we will talk about reciprocal access on trade and intellectual property questions," Merkel said during her weekly video address. "And we want to strengthen multilateralism. That will play a role in our talks."

Read more: Germany and China — trade partners and competitors

German companies feel that they are at a disadvantage when it comes to public tenders, as China has been pursuing a policy of giving Chinese businesses preferential treatment. Business leaders from Germany have been requesting an easing of conditions and improved market access when doing trade with China. Merkel is expected to address these issues and also demand a lowering of tariffs in order to facilitate future trade. The Chancellor has been advocating an increased partnership between the two countries on fair terms for over a year.

However, a survey by polling institute Allensbach meanwhile shows that seven out of 10 top German business managers are concerned about Germany's growing dependence on China, especially as Chinese investments in German companies have been skyrocketing. 

China's human rights record

The Chancellor is expected to also discuss the nuclear deal with Iran, to which China is one of the signatories. Following US President Donald Trump's announcement to pull the US out of the agreement, Germany and China are expected - alongside other signatories - to try to preserve the deal to limit Iran's nuclear program in return for the lifting of sanctions.

With China depending on Iran for oil deliveries and Germany hoping to keep the situation in the Middle East as peaceful as possible, the two countries are likely to agree on this issue.

The subject of human rights in China, however, may be more difficult for the Chancellor to address, as the country has been clamping down on dissident voices under Xi Jinping's leadership.

Germany has been pushing for the release of Liu Xia, the widow of Nobel Peace Prize Laureate Liu Xiaobo, who has been living under house arrest since 2010. Lui has expressed her desire to move to Germany, and the German government has signaled that she would be welcome.

Merkel has addressed China's human rights record on previous visits to Beijing, but to no avail.

The case of Liu Xia

ss/jm (AP, dpa)

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