Prof. ST Hsieh
Director, US-China Energy Industry Forum
May 9, 2023
Germanys’ liberal values are important to Germans, understood. But bilateral trades between Germany and China “are good businesses” because both nations benefited. Specifically, Germany followed the US lead and supported the proxy war in Ukraine started more than a year ago with heavy sanctions against Russia. As a result, German’s economy has been stagnated risking recession like many EU nations. It is almost a certainty that if the war in Ukraine does not stop soon, German’s economy will tank.
At the same time, Germany has been very vocal against China. One main issue is German’s liberal ideology. The other issue is German insisted that China should join the west and sanction Russia for the war in Ukraine. China has staunchly maintained a neutral stance. As such, China is the only major global power initiated a peace proposal that has a chance to start the discussion for a cease fire between Russia and Ukraine.
It is an irony that the German Foreign Minister Annalena Baerbock urged China to use its clout to find a peaceful solution to the conflict but suggested that Beijing wasn’t doing enough yet. Where is German’s clout? If German is genuinely or sincerely interested in a peaceful resolution, why is German and her allies are still shipping arms to Ukraine? It amounts to “pour oil on the fire!”
Basically, German’s position toward China: “partner, competitor, systemic rival” is the same as the US. It is amazing that German asks Europe to speak with one voice against China, but the current coalition government of Germany could not agree on a unified China policy. The same goes with Biden that he has yet to announce his China policy.
It is a very complex world and event flows around the clock. Instead of formulating a detailed policy, it could be more productive to face reality but maintain some consistent, sincere, and honest diplomatic exchanges.
China says it’s in touch with all parties in seeking Ukraine ceasefire
Alexander Ratz and Friederike Heine
Tue, May 9, 2023 at 6:38 AM PDT
BERLIN (Reuters) – Chinese Foreign Minister Qin Gang said on Tuesday that Beijing would maintain lines of communication with all parties to the war in Ukraine, including Germany, in seeking a ceasefire.
“As a permanent member of the United Nations Security Council and responsible major country, China will neither watch the fire from the other bank nor add fuel to the fire,” Qin told reporters alongside German counterpart Annalena Baerbock during a visit to Berlin.
“China is willing to maintain communication with relevant parties, including Germany, to achieve an early ceasefire.”
Baerbock welcomed Chinese President Xi Jinping’s recent talks with Ukrainian President Volodymyr Zelenskiy – their first since the February 2022 Russian invasion, but said it was important for Beijing to make explicit its support for Ukrainian sovereignty and territorial integrity.
She said that China – which with Moscow declared a “no limits” partnership just days before Russian troops swept into Ukraine – “can play a significant role in ending the war if it chooses to do so”.
Qin and Baerbock also touched on a European Union proposal to blacklist some Chinese companies and curb exports to nations seen as involved in bypassing Russia trade restrictions under the latest set of EU sanctions against Moscow over the invasion.
Qin said Beijing “firmly opposes some countries in using their so-called laws to impose long-arm jurisdiction and unilateral sanctions on other countries, including China”.
He added: “China will make necessary responses and resolutely safeguard the legitimate rights and legitimate interests of Chinese enterprises.”
Germany has been reassessing its bilateral relations with China amid increased wariness of Beijing as a strategic rival even as it remains Berlin’s largest trading partner.
China says it won’t seek to benefit from war in Ukraine
Tue, May 9, 2023 at 7:33 AM PDT
BERLIN (AP) — China’s foreign minister said Tuesday that his country has no intention of benefiting from the war in Ukraine and hopes for further discussions on a peace plan Beijing proposed earlier this year.
Speaking after a meeting with his German counterpart in Berlin, Foreign Minister Qin Gang noted the recent talks the government in Beijing had with both Moscow and Kyiv, and said China’s special envoy for Europe was expected to visit Ukraine again soon.
“We won’t pour oil on the fire” of the war, Qin said, according to an official interpreter.
Western countries have accused Beijing of providing political and material support to Russia since its invasion of Ukraine in February 2022. The European Union is currently considering imposing sanctions against companies that supply critical components to Russia’s arms industry.
Qin denied Chinese firms were doing so. He said China maintains “normal” trade relations with Russia, not mentioning a significant bump in China’s purchases of Russian crude oil at a major discount.
German Foreign Minister Annalena Baerbock urged China to use its clout to find a peaceful solution to the conflict but suggested that Beijing wasn’t doing enough yet.
“As a permanent member of the United Nations Security Council, China can play a significant role in ending the war, if it decides to do so,” she told reporters in Berlin.
Baerbock welcomed recent statements by the Chinese government confirming the sovereignty of countries that once made up the Soviet Union, adding that the position must hold for Ukraine, too.
The German government is currently in the process of adjusting its policy toward China, with some in the three-party coalition government pushing for a tougher line toward Beijing.
Chancellor Olaf Scholz said in a speech to the European Parliament on Tuesday that he favors a “de-risking” rather than a “decoupling” of Germany’s economy from China.
The distinction did not satisfy Qin, who suggested the German government’s eventually policy could hurt trade between the two countries.
“Normal economic change should not be politicized,” he said.
“We won’t allow our liberal values to be bought in return for good business,” he told German news site The Pioneer.
Germany’s Industrial Plunge Revives Winter Recession Fears
Mon, May 8, 2023 at 4:38 AM PDT
(Bloomberg) — German industrial production sank by the most in a year — raising the risk that Europe’s largest economy slipped into a winter recession.
Output dropped 3.4% in March, more than the 1.5% decline economists had predicted in a Bloomberg survey. The decrease was especially pronounced in the automotive sector, according to the statistics office.
That means Germany could record a recession between October and March after teetering on the edge of one since Russia attacked Ukraine and inflation took off. A preliminary estimate for the first three months of 2023 was for stagnation, following a 0.5% contraction in the fourth quarter.
Monday’s numbers follow a more than 10% slump in March factory orders, with ING economist Carsten Brzeski pointing to weakness elsewhere too.
“All German macro data in March plunged,” he said in a report to clients. “Retail sales and exports dropped sharply, and together with today’s industrial-production data, have increased the chance of a downward revision to first-quarter GDP growth.”
Monday’s numbers signal that “the second quarter is going to be difficult for the construction sector because the backlogs are coming to an end and then the third quarter may be very difficult for the automotive sector, again because the backlogs are coming to an end, and there are no new orders,” said Ludovic Subran, chief economist at Allianz.
Vincent Chaigneau, Generali head of Investment Strategy Research, described a two-speed economy where manufacturing is weak but services are very strong — a phenomenon that’s visible beyond just Germany.
“That’s true for Europe, that’s true globally,” he said. “We might escape recession in the central scenario contrary to the US. In Europe, we might avoid that but the economy should still come to a standstill.”
Scholz Says China Increasingly Rival Rather Than Partner for EU
Tue, May 9, 2023 at 3:03 AM PDT
(Bloomberg) — German Chancellor Olaf Scholz urged the European Union to reduce its reliance on China, accusing the government in Beijing of increasingly acting as a rival and competitor rather than a partner.
Speaking to EU lawmakers in Strasbourg to mark Europe Day, Scholz laid out his vision of a reformed and enlarged bloc that must speak with one voice on issues including ties with China if it wants to play a leading global role.
“Our relationship with China is aptly described by the triad ‘partner, competitor, systemic rival’ – although without a doubt rivalry and competition on China’s part have increased,” Scholz said. “The EU is aware of this development and is reacting accordingly.”
Scholz said he agreed with European Commission President Ursula von der Leyen that the 27-nation bloc should not aim for an immediate decoupling from China, but implement a “smart derisking.”
China is Germany’s most important trading partner and cutting entrenched business ties would hurt Europe’s largest economy.
At the same time, tensions with Beijing have increased due to China’s increasingly aggressive stance toward Taiwan. Russia’s attack on Ukraine exposed Germany’s over-reliance on Russian fossil fuels and Scholz and his government are keen to avoid a similar error with China in areas including technology and raw materials.
The EEAS, the EU’s foreign affairs arm, is working on a new strategy for the bloc toward China which will be discussed by member states.