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Merkel’s Visit to China: Freedom, Trade, but No Europe

BLOG - 11 September 2019

Chancellor Angela Merkel has just returned from her 12th visit to China and it may have been the most difficult one to date. The world had been watching her, more closely than for previous visits at least as two topics coincided, both of them of high relevance and commanding public attention: Hong Kong’s pro-democracy activists as well as Western democracies were looking for Merkel to comment on the events in Hong Kong, which are challenging the Chinese leadership, as it has not been seen since the protests on Tiananmen Square, which culminated in a massacre on June 4, 1989.
 
At the same time many observers were waiting to see how Merkel would deal with Beijing, which is in an on-going trade dispute with the U.S. It did not come as a surprise when Merkel reminded her Chinese hosts that the trade dispute is affecting German companies too. China had been probing the mood in Germany and Europe whether it might be possible or not to get them to side with China against the U.S. After all both sides are vulnerable. Merkel stood for multilateralism, saying during her talks with Prime Minister Li Keqiang in Beijing on Friday (September 6), "That is why Germany has a major interest in properly functioning multilateral trade, a strong WTO and also robust bilateral trading relations"
 
Merkel has always addressed human rights issues and this time too she did not spare her Chinese hosts. Even without Hong Kong’s leading activist, Joshua Wong, calling on her to address the concerns of Hong Kong’s pro-democracy movement, she would have mentioned the issue. Merkel both discussed Hong Kong with Premier Li and addressed the matter in a press conference, saying that the rights and freedoms of people in Hong Kong "must be guaranteed". We may assume she did not mince her words in her conversation with President Xi Jinping either.

Merkel, as it is tradition, traveled with a high-level business delegation to China, including the CEOs of BASF, BMW, Deutsche Bank and Siemens. Merkel and Li signed a total of 11 agreements to expand cooperation in areas such as aviation, automotive, clean energy and finance.

Merkel and Li signed a total of 11 agreements to expand cooperation in areas such as aviation, automotive, clean energy and finance.

Deutsche Post subsidiary StreetScooter and automobile manufacturer Chery agreed during the visit to begin a local production of electric vehicles. The insurance company Allianz pledged to strengthen cooperation with the Bank of China. The list goes on. Such deals illustrate the importance of China as a trading partner to Germany (and vice versa). China is Germany’s most important trading partner looking at a trade volume of almost €200 billion last year.

During the sixth meeting of the Sino-German economic advisory committee, which took place during Merkel’s visit, she invited Chinese companies to invest more in Germany. In this context Merkel also pushed for an acceleration of negotiations to conclude the investment treaty between the EU and China; she even noted that the negotiations could be concluded in the second half of 2020, when Germany holds the Presidency of the European Council. That appears very much tongue-in-cheek: not long ago China wanted to upgrade the investment treaty to a free trade agreement. Since it is clear that there will be no FTA China is now urging to conclude the investment treaty after all. Merkel’s remarks may have been a veiled warning towards her Chinese hosts to do their homework and to bring negotiations on an investment treaty finally to a close.
 
Equally, her remarks made at Huazhong University for Science and Technology, during her subsequent visit in Wuhan in Hebei province contained an allusion that certainly cannot have been lost on her hosts: "More than ever before we must think multilaterally rather than unilaterally (…) we need to act together, rather than alone." It was not least Xi Jinping himself who had pledged in Davos to "adhere to multilateralism to uphold the authority and efficacy of multilateral institutions."

This time Merkel had to find a delicate balance between business and the human rights issue. Traditionally, during her visits, the priority is to close as many business deals as possible. This time this ambition  was even greater considering  the German economy needs those deals as a recession looms. At the same time she had to satisfy the German public in addressing human rights, which are also a matter close to her heart. A dilemma she always had to face. This is a dilemma the chancellor may have to deal with in the near future even more so: while Merkel was in China, the protests in Hong Kong had not escalated. But what if they had?

A European path, which would have to be a Franco-German path, was, however, the most important topic missing from Merkel’s agenda in China.

This of course raises  a larger question not only for Germany but also for any other democracy: Where is the red line and what happens if this line is crossed? This question shines a light on another question, not less salient: Xinjiang, where more than one million Uyghurs are imprisoned in what China calls re-education camps. The red line for Hong Kong is probably Tiananmen: The Chinese army crossing the border and shooting Hong Kong’s protesters. In the case of Xinjiang there hardly seems to be any red line left. During her visit Merkel did not even mention Xinjiang.
 
Of course this is not asking whether business with China should continue or not. Developing close economic relations with China has brought economic well-being to hundreds of millions of Chinese, and it has simultaneously contributed to affluence in the West. The question is rather, whether there is a red line and where it is. In the case of Russia, since the annexation of the Crimea Peninsula, Western countries have been able to absorb the damage that sanctions imposed on Russia does to them as well. In the case of China, however, that damage could likely not be absorbed. Should the German government ever consider sanctions it seems impossible to get the German industry in line.
 

Even without crossing a red line, China is recognized as a "systemic competitor" as the BDI, the Federation of German Industries, stated in a policy paper on China. The larger question to this is how to deal with such a competitor, a competitor that flaunts the rules which have been so beneficial to all sides. This question in fact is not one that Germany alone can answer. It is a question that begs a German and a French answer; and even more importantly, that can only be resolved lastingly at the European level.
 
A European path, which would have to be a Franco-German path, was, however, the most important topic missing from Merkel’s agenda in China. It remains to hope that Merkel has brought back some reflections on that, which might help to formulate a European response. Last but not least, Ursula von der Leyen, Merkel’s protégé, now holds the responsibility in  the European Commission to deal with double challenges such as the ones the chancellor faced in Beijing just now..
 

Copyright : Andrea Verdelli / POOL / AFP

 

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