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Continental Powers: China And Germany Forge A "Special Relationship"

Article illustrative image Partner logo German Chancellor Angela Merkel and Chinese Premier Wen Jiabao set for a powerful link

BEIJING - Every time that German Chancellor Angela Merkel makes a trip to China, she always goes home with a large chunk of investment. Her just concluded visit was no exception. In addition to more than 10 cooperation agreements in areas such as aerospace and the automotive industries, Merkel has also obtained a commitment from Wen Jiabao, the Chinese Premier, that “China is willing to continue to invest in European debt under the premise of fully considered risk control."  

This is already Merkel’s second visit to China this year, and her sixth since she became Chancellor in 2005. As the German newspaper Bild put it: even the meetings between Merkel and President Barack Obama are outnumbered by her meetings with the “Chinese comrades.”

At a press conference prior to this latest visit, German officials even described Sino-German relations as a “special relationship.” 

In 1946, Winston Churchill, then Britain’s Prime Minister, used the term “special relationship” to describe the U.S.-UK bond. Since then, the term has been recycled in diplomacy to describe “unparalleled” allied relations between two nations.

Obviously due to various differences, including political ideology, the Sino-German “special relations” are bound to be different from that of the U.S. and the UK. Nevertheless, there’s no doubt that both governments have an eager desire to enhance communication and cooperation with each other.

This second round of Sino-German negotiations co-chaired by Wen and Merkel was originally scheduled to take place in 2013. But China proposed to push it up on the calendar, and Germany readily agreed. China says that it wants the consultation to be held this year because the Chinese leadership is about to change and Merkel will be able to establish contact with China’s future leader, taking the chance to discuss how the two states can strengthen their collaboration.

With trade at the center of the German chancellor’s trip, and the continuing heating up of Sino-German business dealings, some Europeans worry whether the continent’s biggest economy might cast aside Brussels and deal with China alone.

What is certain is that Germany will not undermine its European neighbors, in particular on the diplomatic front. However, it is foreseeable that Germany will establish closer economic ties “unilaterally” with China.

Going solo

The EU has been trying to set up a unified trade policy towards China among its 27 member countries. Still, each of these members has been secretly trying to establish tighter commercial links with China individually. Among the EU member states, as well as its different institutions, there are a range of interests and positions. Agreement is difficult to reach. Meanwhile, Germany thrives alongside the European debt crisis and holds a leading position in that crisis. This makes it a country that China is more inclined to deal with. 

But an even more fundamental reason is that Germany is one of the few EU countries that are economically complementary with China. China needs expertise, and Germany needs Chinese markets.

Chinese companies that possess sufficient funds expanded their investments in Germany during the European debt crisis, in particular medium-size companies that are leaders in their fields but are still not well known. For example, the Lingyun Group, an affiliate of China’s state-owned weapons and equipment group, the China North Industries Group, has united with other Chinese groups in the acquisition of Kiekert, the German automotive locks manufacturer. Kiekert is the global leader in latch closing systems and owns more than 840 patented technologies.

Meanwhile, Merkel’s attitude towards China has shifted gradually from hardline to pragmatic. Not only has she sidestepped issues such as human rights and patent protection, but she also indicated that she wishes that the EU would not start an anti-dumping procedure with regards to the photovoltaic dispute issue between China and the EU.

Still, from the point of view of strategic balance, the current warm Sino-German ties does not replace the China-EU relationship.

Following Merkel’s visit to China, the EU-China summit is to be held in Brussels in a few weeks. The Chancellor will deliver an address and German officials insist that they will express a view based on the interests of the whole EU. I’m afraid that this EU is really the “German Europe” that has been spawned by the debt crisis. This means that eventually Sino-EU relations will morph into Sino-German relations.

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About this article source Website: http://www.caixin.com/

Caixin is a hub for financial and economic news in China. Serving high-quality and original content, Caixin.cn focuses on key financial and economic information.

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