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Scholz in China calls for economic ties 'as equals' Scholz asks China to press Russia to end its war
(about 3 hours later)
The German chancellor said direct talks were important and made clear he would not ignore controversial issuesThe German chancellor said direct talks were important and made clear he would not ignore controversial issues
China's Xi Jinping has urged deeper economic co-operation with Germany, during a visit by Chancellor Olaf Scholz to Beijing. German Chancellor Olaf Scholz has urged China to use its influence on Russia to stop the war in Ukraine, during talks with President Xi Jinping in Beijing.
The trip has sparked controversy in Germany and concern elsewhere in Europe, after the Chinese leader cemented his grip on power. Mr Scholz said both countries had agreed Russia's nuclear threats were irresponsible and highly dangerous.
Mr Scholz spoke of having "economic ties as equals, with reciprocity". The Chinese president has refused to condemn Vladimir Putin's invasion.
President Xi said the two countries should work together in "times of change and turmoil". But he said the global community should back bids to end the crisis peacefully and oppose the use or threatened use of nuclear arms, Chinese reports said.
The chancellor's visit - the first by a G7 leader since the coronavirus pandemic - follows an extraordinary and bitter row within the Berlin government. The trip has sparked concern in Germany and elsewhere in Europe, after the Chinese leader recently cemented his grip on power.
It had emerged that a Chinese company was poised to buy a significant stake in a part of the port of Hamburg. No fewer than six government ministers reacted furiously. Mr Scholz's visit to China is both short, at just 11 hours, and controversial.
The deal, they argued, would give China significant influence over critical German infrastructure. Germany's security services also urged caution. He's the first Western leader to travel to Beijing since the global pandemic and the first to meet President Xi since he tightened his grip on power at the Communist Party National Congress last month.
But the German chancellor appeared insistent the deal should go ahead. He reportedly pushed through an agreement, albeit one that limited the size and influence of the stake, reducing it to 24.9%. The timing is seen as highly questionable by many in Europe - including members of Mr Scholz's own government, who worry that his presence will serve to burnish the domestic reputation of an increasingly authoritarian Mr Xi.
No-one is quite sure why he seemed so determined. A former mayor of Hamburg, Mr Scholz remains close to the city authorities who argued that the deal represented vital investment. But the German chancellor, like his predecessor Angela Merkel, argues that global problems can only be solved through co-operation with China. Meeting face to face, he said, facilitated discussion, even of issues over which both countries strongly disagree.
But plenty of other commentators suspect an ulterior motive; that Olaf Scholz did not want to turn up in Beijing without a "gift" for Xi Jinping. So what has he achieved?
That has raised both eyebrows and concerns. There was a mutual acknowledgment that times were tough; President Xi expressed his desire to work together in "times of change and turmoil".
As has the chancellor's decision to take with him a delegation of German business executives. That was standard practice for his predecessor, Angela Merkel, who pursued a policy of "Change through Trade", believing that economic ties could influence political relations with countries like China and Russia. There was an agreement to keep talking - about the war in Ukraine, global food and energy security, climate change and the global pandemic.
The chancellor's visit comes hard on the heels of the National Congress of the Chinese Communist Party, at which President Xi tightened his grip on power and raised concerns in the West about his intentions towards Taiwan. Mr Scholz repeated Germany's position on Taiwan - any change of the status quo must be peaceful and with mutual agreement - and on human rights - they must be protected, especially with regard to minorities in Xinjiang.
"The signal that's being sent is that we want to extend and intensify our economic co-operation - that must be questioned," says Felix Banazsak, a politician from the Green Party, a partner in Mr Scholz's coalition government. The visit will be closely scrutinised in Europe's capitals.
The Greens have long sought a tougher line on China. Just a few days ago the party's foreign minister, Annalena Baerbock, sternly and publicly reminded him that his government came to power promising to readjust its China strategy. Mr Scholz came to power promising a values-led foreign policy and a change in Germany's approach to China; a pledge he reiterated prior to his visit. "If China is changing then our approach to China must change," he said.
Mr Banazsak says his country must learn from its previous dependence on Russian energy: "We must make ourselves as independent as possible from individual states, particularly if these are states which do not share our values." But many in Germany and in Europe simply don't trust him on that; in part because of a recent - and controversial - proposal to sell a stake in the port of Hamburg to a Chinese company.
But Olaf Scholz will be painfully aware of the complexity and depth of his country's ties with China, which remains Germany's largest trading partner, although Germany imports more than it exports. Six of his ministers opposed the deal and the security services urged caution but Mr Scholz reportedly forced through an agreement, albeit one that reduced the size and influence of the stake. The suspicion in Berlin was that he wanted a "gift" to take to China.
More than a million German jobs depend on that relationship. Take as an example car giant Daimler, which sells more than a third of its vehicles in China. And Mr Scholz chose to travel with a delegation of executives from German companies like BASF, Volkswagen and Bayer.
"The signal that's being sent is that we want to extend and intensify our economic co-operation," said one Green politician, whose party has long sought a tougher stance on China.
German company Daimler is expanding its resources in ChinaGerman company Daimler is expanding its resources in China
In the first half of this year, German businesses invested more in China than ever before. Chemical company BASF has just opened a new plant in south China and expects to invest €10bn (£8.6bn; $9.9bn) in the site by the end of this decade. Taking executives along was standard practice for Mr Scholz's predecessor, Angela Merkel, who pursued a policy of "Change through Trade," believing that economic ties could influence political relations with countries like China and Russia.
On the eve of the visit, the head of the German Automotive Industry Association pointed to Germany's reliance on China for raw materials and warned that "de-coupling" would be an economic and geo-strategic mistake. But Germany's reliance on cheap Russian energy laid bare the inherent flaws of that strategy. And China, once a partner, is now also viewed as a rival in Berlin.
Her counterpart at the Association of Small and Medium Businesses also advised against a sudden change in course, saying "the advice can only be not to smash any Chinese porcelain now". And, when President Xi urged "deeper co-operation" with Berlin on Friday, a shudder will have run down the spine of those who worry that German business is too closely woven into China. What would happen they ask, in the event that China invaded Taiwan?
Chancellor Scholz is spending less than 12 hours in Beijing. His aim, he said ahead of his journey, was to find out how much co-operation was still possible - because "the world needs China" in the fight against the global pandemic and climate change. More than a million German jobs depend on the relationship.
"If China is changing, then our approach to China must change," he said. Take, as an example, the car giant Daimler which sells more than a third of its vehicles in China. In the first half of this year, German businesses invested more in the country than ever before; the chemical company BASF has just opened a new plant in south China and expects to invest €10bn (£8,75bn) in the site by the end of this decade.
Many in Berlin and beyond will be looking for evidence of that Mr Scholz's response to a shifting China may yet come to be the defining test of his chancellorship. Few in Berlin would urge Germany to "decouple" from China. As one business leader put it on the eve of Mr Scholz's trip: "The advice can only be not to smash any Chinese porcelain now." But there is considerable appetite to insulate Germany against too great a dependency.
And Mr Scholz must perform a tricky balancing act. Protect the German economy without risking accusations (there've been a fair few in recent months) that he's putting German business interests above all others.
Mr Scholz's response to a shifting China may yet come to be the defining test of his chancellorship.
Scholz trip ruffles feathers in EuropeScholz trip ruffles feathers in Europe
Germany is the EU's most powerful economy and arguably most influential member, so what it says and does matters.Germany is the EU's most powerful economy and arguably most influential member, so what it says and does matters.
I once suggested former Angela Merkel could be viewed at times like a European Donald Trump for the way she tended to put Germany first.I once suggested former Angela Merkel could be viewed at times like a European Donald Trump for the way she tended to put Germany first.
Wider EU concerns were ignored in favour of lucrative German energy and trade contracts with Russia and China. She demanded EU austerity measures for Mediterranean member states during the eurozone crisis to protect German taxpayers from incurring shared debt.Wider EU concerns were ignored in favour of lucrative German energy and trade contracts with Russia and China. She demanded EU austerity measures for Mediterranean member states during the eurozone crisis to protect German taxpayers from incurring shared debt.
Olaf Scholz is Mrs Merkel's successor in far more than just name, in the minds of many EU leaders.Olaf Scholz is Mrs Merkel's successor in far more than just name, in the minds of many EU leaders.
His massive aid package to help German businesses with high energy prices is viewed as giving them an unfair competitive advantage on the European single market.His massive aid package to help German businesses with high energy prices is viewed as giving them an unfair competitive advantage on the European single market.
And his trip to China, announced but not co-ordinated with others in the EU, has ruffled feathers Europe-wide. France's Emmanuel Macron recently warned Mr Scholz he risked becoming isolated. And his trip to China, announced but not co-ordinated with others in the EU, ruffled feathers Europe-wide. France's Emmanuel Macron recently warned Mr Scholz he risked becoming isolated.
As Europe, and Germany first and foremost, weans itself off its dependency on Russian gas, the question is this: Is Berlin, blinded by the prospect of business deals, binding itself too close to China?As Europe, and Germany first and foremost, weans itself off its dependency on Russian gas, the question is this: Is Berlin, blinded by the prospect of business deals, binding itself too close to China?
French President Emmanuel Macron has been pushing for years for the EU to become less beholden to Beijing. Critics accused him of protectionism.French President Emmanuel Macron has been pushing for years for the EU to become less beholden to Beijing. Critics accused him of protectionism.
But after global supply-chain breakdowns during the Covid-19 pandemic, the "weaponisation" of energy imports/exports after Russia's invasion of Ukraine and Donald Trump's presidency, it became clear Europe should no longer rely so heavily on the US in terms of security.But after global supply-chain breakdowns during the Covid-19 pandemic, the "weaponisation" of energy imports/exports after Russia's invasion of Ukraine and Donald Trump's presidency, it became clear Europe should no longer rely so heavily on the US in terms of security.
With Mr Macron's insistence on the continent becoming more cohesive and self-reliant, diversifying its trade partners began to seem sensible to Brussels. Olaf Scholz is viewed as worryingly out of step.With Mr Macron's insistence on the continent becoming more cohesive and self-reliant, diversifying its trade partners began to seem sensible to Brussels. Olaf Scholz is viewed as worryingly out of step.