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Merkel in China

“Beijing-Berlin connection” revisited

By Mikko Huotari

20 June 2016

Germany has built a more cooperative relationship with China than most Western nations. But even Angela Merkel’s influence in Beijing only goes so far, as her recent trip has shown. In light of Beijing's more aggressive foreign policy, Germany is well advised to coordinate its China policy as closely as possible with its European and non-European partners.

German Chancellor Angela Merkel was showered with honours during her 9th visit to China. Clad in a red and black robe, she received the honorary doctorate of the University of Nanjing. A day later, she and half of her cabinet descended on Beijing for government consultations. This event, which both sides have held regularly since 2011, goes beyond the dialogues other Western nations have with China and has become a symbol of the close Sino-German relationship.

The Beijing-Berlin Connection, as it has been called in Foreign Affairs, is often viewed with a mix of suspicion and envy in other Western capitals.  Is Germany going soft on China to protect its own economic interests? Or is it “a model for other mid-sized powers, and even for the United States, in demonstrating how to cooperate with China without antagonizing it, while adhering to its liberal democratic principles”, as Klaus Jarres claimed in Foreign Affairs as recently as May 2016?

The truth is that a mixture of both elements contributed to Germany’s alleged “special relationship with China”. But as of June 2016, it should be clear that this relationship, while still shiny on the outside, has run into serious difficulties, which neither economic opportunism nor political statecraft can resolve easily. The assertive course of China’s leadership in economic issues, domestic politics and foreign affairs show that Berlin can’t go it alone when it comes to dealing with Beijing.

“Going soft” won’t protect German interests

Many in the German government and public feel like “going soft” will not protect German economic interests in the current situation. It is true that Germany has long had a more balanced trade relationship with China than the United States. Germany’s strong manufacturing sector has benefitted greatly from China’s market in the past decades, but growth in China is slowing down while restrictions for foreign market access remain high or even increase.

As China has embarked on a strategy of “outward-directed industrial policy“, fears about Chinese companies buying up critical assets of Germany’s industrial competiveness feed into a new wave of European protectionism. The domestic German drama surrounding the takeover bid by Chinese household appliance maker Midea for the Bavarian robot maker Kuka overshadowed the visit of Merkel and her cabinet. Meanwhile, the reality for European companies on the ground in China remains challenging: technological advantages are being sucked up by Chinese joint venture partners and increasingly endangered by outright cybertheft.

On the societal or domestic level, China’s new law governing the “management” of NGOs is a big concern for the large number of German civil rights organisations and political foundations working in China who will now be subject to more direct police control. International protests could do nothing to prevent the draft from becoming law in April, and during her visit to Beijing, Merkel could only extract a face-saving assurance that there would be an “early-warning system” to prevent uncomfortable surprises.

Germany has been able to cooperate from a strategic standpoint in other parts of the international arena, and the announcements of German-Chinese cooperation on railroad projects in Asia, on training mine workers in Afghanistan and on development cooperation were small but important successes of Merkel’s trip. But efforts to be a mediating voice have so far done nothing to ease tensions in the South China Sea ahead of the expected ruling on China’s territorial claims in the region by an international tribunal.

Germany should act in concert with EU and G7

If Beijing’s leaders had hoped that Germany would act as a neutral or even pro-Chinese go-between within the European Union on the question of granting China the status as a true market economy or even vis-à-vis the US on the South China Sea, the domestic political hardening in China and Beijing’s more aggressive foreign policy has resulted in a tougher stance on the German side.

In light of the current signals coming out of China, Berlin’s best choice is to seek even closer coordination with other EU member states, and yes, also with the United States. On the question of China’s market economy status, Merkel sounded conciliatory, but she made it clear that she would not preempt a decision by the European Commission. She also spoke for the rest of the EU when she called on China to stop distorting European and global steel markets by exporting its own overcapacities. In late May, Germany joined an unusually tough G7 statement calling for an international law-based resolution of territorial disputes in the South China Sea that was clearly directed at China’s unilateral actions to expand territorial control in the region.

Germany may be the only Western nation that enjoys the privilege of conducting regular full-fledged bilateral government consultations at prime-ministerial level in Beijing. But Merkel seemed acutely aware that this is not the time for bilateral dealings on autopilot with Beijing. Berlin may still have better access and standing in Beijing than others. But an effective China policy can only be developed in concert with Germany’s European and non-European partners.

via MERICS blog