German-Chinese relations: “Scholz won’t get very far with this”

According to Asia expert Shi-Kupfer, Germany’s influence on China’s leadership is “not substantial.” Chancellor Scholz achieved little with his demand for fair trade relations – and China was also following its own interests in the Ukraine war.

tagesschau.de: Chinese President Xi Jinping emphasized to Federal Chancellor Olaf Scholz the importance of German-Chinese trade, which ensures stable relations, does not pose any risk and opens up future opportunities. In the broadest sense, this is also how the CEOs of Mercedes Benz and BMW approached the ARD expressed. It sounds like trade relations are in good shape. Do you share the impression?

Kristin Shi-Kupfer: The impression should only be shared to a limited extent. It is striking that both Xi and the German board representatives have tried to emphasize the positive aspects for different reasons.

Despite efforts to diversify and de-risk, individual companies still see good business opportunities in China. Overall, German investments have increased somewhat, but so have the problems. The latest flash survey by the Foreign Chamber of Commerce describes the problems that still exist and have not gotten better – especially when it comes to the disadvantages faced by foreign companies when it comes to market access or public tenders.

And then there is the problem that the Chancellor addressed much more clearly the day before in Shanghai: that the People’s Republic of China is offering excess capacity, for example in electromobility, at dumping prices on the European market.

Demands are “little heard”

tagesschau.de: Do you have the impression that the demand for fair competition is being heard in the People’s Republic?

Shi copper: They are being heard, but it seems to me that they are being heard little. And whether they are met with understanding is another question – and whether that then leads to changes in economic policy is another question. That doesn’t seem to be the case to me. In the private media and in the so-called social media, reference is made to a difference between Scholz and EU Commission President Ursula von der Leyen, who almost simultaneously threatened EU measures against the People’s Republic. There is a contradiction between them, and Scholz’s visit with twelve company leaders shows that China is still needed and that “de-risking” is neither realistic nor sensible.

“Obviously there are differences in the government”

tagesschau.de: This difference also exists in the federal government. The State Department released a China strategy last year that accused China of wanting to increase the West’s dependence on production. The Chancellor adopts a gentler tone. Do differences emerge here?

Shi copper: The China strategy was a necessary process to set at least a rough framework within the federal government for priorities in dealing with China. But it is clear that there are differences within the government. This is also noticed in China.

The pro-Chinese broadcaster Hong Kong Satellite Television writes on the Chinese platform Weibo with a sarcastic undertone and in reference to – fictitious – German media reports that Foreign Minister Annalena Baerbock and Economics Minister Robert Habeck stayed at home because they were only causing trouble for Scholz. This disunity towards China certainly doesn’t help – but this also applies to the disunity within the European Union.

“Not entirely understandable concern”

tagesschau.de: What is the Chancellor achieving with his somewhat withdrawn approach?

Shi copper: He doesn’t get very far with it. Scholz seems to be concerned, which I don’t entirely understand, about not unnecessarily alienating the Chinese government, given China’s importance for individual industries. We are talking about mutual interdependence. There are critical dependencies on individual raw materials or chemicals, but China also continues to have an interest in foreign and German investments.

And it senses that EU punitive trade measures would bite and certainly hurt, as would restrictions on Chinese digital companies in the European market. Here the federal government could and should set clearer conditions for China, just as the EU Commission is doing.

“The Chinese government doesn’t talk about this openly”

tagesschau.de: The geopolitical questions between Scholz and Xi included, among other things, China’s position in the war against Ukraine. Here the Chinese President told Scholz that China is not a party in this context. Isn’t that a pretty euphemistic portrayal?

Shi copper: The Chinese translation said China was not a directly involved party. But in fact, that glosses over China’s support of Russia, be it through expanding trade with Russia, be it through supplying, for example, drones, aircraft engines or other machine parts that will be used for war equipment such as missiles, which helps Russia in to endure this conflict and stand as it stands now. China is covering this up with this formulation and is something the Chinese government does not talk about openly.

tagesschau.de: What strategy is China pursuing in this war?

Shi copper: From the Chinese government’s perspective, the war is in its interests. An ongoing, non-escalating conflict binds the US and European governments and limits their ability to deal with the tense situation in the South China Sea – with the claims that China also makes to Taiwan and other regions.

If the Ukraine war escalates further and sanctions against Russia become even tougher, China could come under even greater scrutiny for its support for Russia. I don’t want to deny that the Chinese government is also interested in a peace agreement. But from a geopolitical perspective, the ongoing conflict certainly doesn’t displease China.

Ambitions in the slipstream of the Ukraine war

tagesschau.de: But above all is the goal of expanding influence in the South Pacific region, including the subordination of Taiwan?

Shi copper: Let us imagine that there would be an escalation in the Taiwan Strait, even if it was unintentional. Then the liberal democracies, which are not only involved in the war between Russia and Ukraine but also in the Middle East, would have a resource problem and would probably also have domestic political difficulties justifying further involvement. In this slipstream, China can continue to pursue its increasingly aggressive and provocative ambitions with regard to Taiwan and the South China Sea.

“No substantial influence”

tagesschau.de: There are observers who praise Scholz for encouraging China to warn Russia against using nuclear weapons in the Ukraine war. So does he have some form of influence over Xi?

Shi copper: I don’t think the German federal government can really exert any substantial influence on China here. There is strikingly positive official reporting about the Chancellor, who is portrayed in a very friendly manner. There are not only nationalist voices on social media, but also a diverse and curious view of Germany that goes far beyond the economic and also relates to social developments.

But fundamentally, it is China’s core interest that the conflict does not escalate, because that would force the Chinese government to take a very clear position. And unlike Russia, the People’s Republic does not want to break completely with the international community and would like to avoid the sanctions that would then be inevitable. However, Germany, the EU and the USA can continue to support this. This is also reflected in Xi’s statement at the beginning of the conversation with Scholz.

The conversation led Eckart Aretztagesschau.de