These are tough times for the European Union following Russia’s illegal invasion of Ukraine in its own backyard. A rift between the bloc’s two superpowers on how to deal with China has only added to a toxic atmosphere.
Germany and France appear to be at loggerheads when it comes to a unified policy to combat the increasing threat of the world’s second-largest economy.
Later this week, German Chancellor Olaf Scholz will hold high-stakes talks with President Xi Jinping and outgoing Premier Li Keqiang in Beijing.
French President Emmanuel Macron had suggested a joint trip to underline EU “unity” but that was rejected by Scholz, according to government sources in Berlin and Paris, the Reuters news agency reported.
“It feels that the chancellery is specifically trying to maintain a certain traditional framework and economic ties with China, [despite strong opposition from the public and much of Scholz’s coalition],” Andrew Small, of the German Marshall Fund, said as reported by Axios.
What this means:
- China is Germany’s top economic partner with bilateral trade hitting US$245 billion last year.
- The partnership is geared around German auto giants such as BMW, Mercedes-Benz and Volkswagen.
- They are now deeply embedded inside China.
- But there are growing concerns about Berlin’s reliance on Beijing.
- In a poll by public service broadcaster ZDF, 84% of Germans would like the country to reduce economic ties with China.
Delve deeper: The study was released as Europe’s leading economy struggles with an energy crisis after being over-reliant on Russia. Gas supplies dried up after Vladimir Putin’s war in Ukraine fueled stringent EU sanctions on Moscow.
Political blackmail: “Complete economic dependence based on hope leaves us open to political blackmail,” German Foreign Minister Annalena Baerbock, of the Greens Party and a coalition partner to Scholz’s Social Democrats, told the Süddeutsche Zeitung newspaper.
Between the lines: Scholz is trying to pull off a political high-wire act by shoring up a key economic relationship amid fears of Germany’s growing dependence on China’s authoritarian regime.
Big picture: Beijing’s policy under “chairman of everything” Xi is to drive a wedge between the EU and the United States, as well as to sow doubt inside the 27-nation bloc.
Divide and rule: “China-EU trade cooperation is of great significance. A deepening China-EU [partnership] can increase the strength of European economies when it comes to rejecting US attempts to preserve its hegemony,” state-run Global Times said in a commentary.
Diplomatic dispatch: European Commissioner Thierry Breton has waded into the simmering row, warning EU nations not to be “naive” when dealing with China.
What he said: “The era of naivete is over. It’s very important that the behavior of member states towards China … change in a way that’s more coordinated than individually-driven, as China obviously wants us to be.”
China Factor comment: Scholz will be accompanied by a large German business delegation. He will also be carrying political baggage. “Olaf Scholz should not go to China. Doing so will be seen by [the] CCP as coming to kiss Xi’s proverbial ring, just as Xi further consolidates power,” Jessica Berlin, a political analyst and founder of CoStruct, tweeted.