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German chancellor's visit exposes EU rifts over China

Priyanka Shankar Brussels
November 3, 2022

Olaf Scholz's trip to China comes amid growing calls for Berlin to take a tougher stance on an increasingly assertive and authoritarian Beijing.

Scholz walking past chinese soldiers
It is Scholz's first trip to China since becoming German chancellorImage: Kay Nietfeld/picture alliance/dpa

German Chancellor Olaf Scholz is embarking on a high-stakes visit to China this week, becoming the first European Union leader to visit the Asian superpower since the onset of the COVID pandemic, as well as the Russian invasion of Ukraine.  

During the one-day trip to Beijing on Friday, Scholz will hold talks with Chinese President Xi Jinping and Premier Li Keqiang.

The German leader has promised a "candid exchange" with Chinese leaders on all issues, ranging from trade and human rights to Taiwan and Russia's Ukraine invasion.

This is also the first trip by an EU leader since Xi secured a precedent-busting third term and further consolidated his grip on power by packing the upper echelons of the party with his loyalists.

In an article for Politico on Thursday, Scholz wrote that "today's China isn't the same as the China of five or 10 years ago," and "as China changes, the way that we deal with China must change too."

Scholz is expected to be accompanied by a high-profile business delegation, comprising top executives from companies like Volkswagen, BASF and Deutsche Bank.

Short-term business interests over strategic concerns?

The visit, however, has sparked criticism as many in Germany and the EU view Scholz as prioritizing short-term business interests over strategic concerns and EU unity.

Scholz's decision to proceed with this trip "displays his narrow focus on German short-term business interests, which has taken precedence over any consideration of EU unity," Mathieu Duchatel, director of the Asia Program at Institut Montaigne in Paris, told DW.

Olaf sholz standing next to XI jinping
Critics say Scholz's trip shows he's neglecting strategic concerns in favor of short-term business profit.Image: Kay Nietfeld /AFP

On Twitter, Norbert Röttgen, foreign policy expert with the opposition Christian Democrats wrote: "Contrary to all announcements, the Scholz government simply continues to bet on short-term profits for large companies, while ignoring the long-term dependency costs relative to China."

The visit comes shortly after Scholz — despite objections from many in his Cabinet and ruling coalition — pushed through a controversial deal to allow Chinese state-owned shipping company Cosco to buy a minority 24.9% stake in one of Hamburg's port terminals.

The deal raised concerns that Beijing is gradually increasing control over key infrastructure on the continent.

Thierry Breton, EU commissioner for the internal market, told Reuters this week that EU nations "should not be naive whenever they approve Chinese investment."

"We need to be extremely vigilant," he said.

EU is not one-sidedly dependent on China

Baltic nations and some other former Soviet bloc countries have also become increasingly suspicious of China's growing economic influence in Europe, particularly given Beijing's "no limits" friendship with Moscow.

At an EU summit in Brussels on October 21 focusing on relations with China, the Baltic states highlighted the importance of talking to Beijing with a "single voice."

"It is important that we don't have separate deals with China because that would mean we are weak as a union," Estonian Prime Minister Kaja Kallas told reporters in Brussels.

Latvian Prime Minister Krisjanis Kariņs said that "China is best dealt with when we are 27, not when we are one and one," in reference to unity within the EU member states.

Germany's Cosco deal: A risky dependency?

Jörg Wuttke, president of the European Chamber of Commerce in China, said that the Baltics' view of China is understandable, considering their history with Russia and Moscow's close partnership with Beijing.

But, he added, there is no issue of one-sided dependencies when it comes to EU-China ties.

"The EU's dependency on Russia was on two vital products, gas and oil. Whereas with China, trade relations are different and China is more dependent on the European Union. Europe also creates millions of job opportunities in China. So I don't see a real dependency discussion there," he told DW. 

Lack of reciprocity in relations

Wuttke, however, stressed that it is important for the German chancellor to remind Beijing of the lack of reciprocity when it comes to market access, with Chinese firms being free to operate in the EU while European companies cannot do the same in China.

"So it should be a conversation about reciprocity," he added.

In his op-ed, Scholz wrote that, despite the "changed circumstances" on account of Russia's war in Ukraine, China remains "an important business and trading partner" for Germany and Europe. "We don't want to decouple from it."

A crane moving Chinese freights in Duisburg, Germany.
Chinese businesses are free to operate in the EU, but European firms do not have that freedom, Wuttke said.Image: Ren Pengfei/Xinhua News Agency/picture alliance

China was Germany's biggest trading partner in 2021 for the sixth consecutive year, its biggest single source of imports and its second most important export destination after the US.

And German industrial giants have continued to invest vast sums of money in the Asian country in recent months, according to the think tank Rhodium Group, which focuses on the Chinese economy.

Despite the close economic ties, calls have been growing louder for Berlin to take a tougher stance on an increasingly assertive and authoritarian Beijing.

This has prompted Scholz's government to currently formulate its first ever China strategy.

Projecting a united front is key

Some argue that Scholz's solo visit to China could weaken his hand in talks with China's leaders and he should have, instead, traveled to Beijing together with French President Emmanuel Macron, which would have projected EU unity.

Nevertheless, Macron and Scholz have so far struggled to be on the same page on China.

Reuters quoted unnamed French and German government sources as saying that Macron had suggested to Scholz they go together to Beijing to send a signal of EU unity and counter what they see as Chinese attempts to play one off against another.

But the German chancellor declined Macron's proposal, the sources said.

Noah Barkin, a Berlin-based analyst of Europe-China relations at the German Marshall Fund of the United States, said that "the optics of traveling separately to Beijing shortly after Xi is anointed to a third term are not great."

However, he pointed out these meetings — after three years of no in-person contact and strained EU-China ties — were understandable.

"Holding bilateral meetings with the Chinese President at the G20 summit in November would make more sense," he told DW, adding: "These separate trips to Beijing will arouse suspicions in Europe and among key allies that Germany and France are pursuing their own agenda in Beijing."

"So it is vitally important for Scholz and Macron not to allow Beijing to play Germany and France off against each other. That would be a major setback for Europe after yearslong efforts to develop a united front."

Edited by: Srinivas Mazumdaru