Scholz walks tightrope on trade and politics in China

Apr14,2024



Beijing: German Chancellor olaf scholz He arrived in China on Sunday, beginning a trip in which he faces a difficult balancing act as he aims to strengthen economic ties with Berlin's biggest trading partner.
Chinese state broadcaster CCTV said Scholz arrived in the southwestern megacity Chongqing on Sunday morning with a large delegation of ministers and business executives.
As Western allies step up pressure on Beijing, Scholz is expected to underline that Germany remains committed to trading with the world's second-largest economy and reject US-led calls for “decoupling.” .
His friendly stance toward China risks angering Washington and its EU partners, who oppose Beijing's heavy subsidies to industries.
“China remains a really important economic partner,” Scholz told reporters on Friday. He said he would try to provide equal opportunities for German companies in China.
On the geopolitical front, Scholz will also use his visit to persuade Chinese President Xi Jinping to rein in his Russian counterpart. Vladimir Putin And help end the war in Ukraine.
“Given the close ties between China and Russia, Beijing has the potential to exert its influence over Russia,” said a German government source in Berlin.
The three-day visit to Chongqing, Shanghai and Beijing is Scholz's second visit to China since taking office.
His first visit in November 2022 came under intense scrutiny as it came swiftly after Xi tightened his grip on power, and was the G7 leader's first visit to China since the pandemic.
Then Western allies, stunned by China's refusal to distance themselves from Russia despite painful supply chain disruptions during the health crisis as well as Moscow's invasion of Ukraine, were struggling to reduce their dependence on Beijing.
'Position of Strength'
Scholz's visit comes as many of Germany's Western allies are confronting China over a number of trade issues.
An investigation into state aid for Chinese solar panels, electric cars and wind turbines is underway in Brussels.
Meanwhile the United States is investigating the national security risks posed by Chinese technology in cars.
Amid rising tensions over Taiwan, US President Joe Biden this week pledged defense to Japan and the Philippines, while describing Beijing's behavior in the South China Sea as “dangerous and aggressive.”
Two days before his visit, Scholz spoke with French President Emmanuel Macron, whose office said the leaders “coordinated to safeguard the rebalancing of European-Chinese trade relations”.
But China is an important market for Germany, where many jobs directly depend on demand from the Asian giant.
Both economies are also in dire need of stimulus.
The German economy shrank 0.3 percent last year due to inflation, high interest rates and declining exports, and the economy ministry expects only a weak 0.2 percent growth this year.
Beijing has set an annual GDP growth target for this year of about five percent, but exports fell more than expected last month.
German lawmakers and analysts urged Scholz to take a tougher stance.
The Green Party's Deborah Duering warned Scholz against seeing China only as an economic opportunity.
“Those who ignore long-term risks for the sake of short-term profits risk repeating the mistakes of the past, misguided Russia policy,” Düring said in reference to past reliance on Moscow for cheap energy supplies.
Max Zenglin of the Mercator Institute for China Studies said Germany should not hesitate to be more assertive.
“As countries like the United States and Japan are positioning themselves more strongly against China, Germany has an important role to play,” he said. He said Germany was “in a strong position”.



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