Merkel marks ‘special’ China relationship

Chinese President Hu Jintao had met with German Chancellor Angela Merkel in Los Cabos on  June to discuss bilateral ties and other issues of common concern.

Πηγή: FT
By Gerrit Wiesmann in Berlin and Kathrin Hille
August 28 2012

Angela Merkel, the German chancellor, will visit China this week to celebrate what her officials see as Germany’s “special relationship” with the Asian heavyweight.

But she will be ducking the sensitive question of whether Chinese solar-power equipment makers are selling products below the cost of production and forcing global rivals to their knees.

Ms Merkel will meet Hu Jintao, China’s president, and Wen Jiabao, the country’s premier, bringing along seven German ministers for something that will almost resemble a joint cabinet meeting with 13 Chinese counterparts.

The chancellor will then visit Tianjin on Friday with a group of German executives, where she will tour the Chinese assembly plant of Airbus, the European aircraft maker, and witness the signing of a big order, if talks finish in time.

With trade between the two export economies topping €150bn last year, German officials see Thursday’s “government consultations” – which involve more members of the ruling elites than the strategic and economic dialogue that China holds with the US – as an expression of a relationship which they say Beijing has with no other EU player, including the European Commission.

Trade has led to investment, although Berlin officials note that the €1.2bn which Chinese companies have invested in Germany pales beside the €26bn that German companies have put in to China. The eurozone crisis, and the shockwaves it has sent across the global economy, has increased the need for communication.

“Chinese officials feel Brussels is failing to deliver a consistent, decisive policy message,” says Jonathan Holslag of the Brussels Institute of Contemporary China Studies think-tank. “For an authoritative voice, they turn to [EU] member states”.

With François Hollande only installed as president of France in May, and the UK’s David Cameron less involved in the struggles of the single currency bloc, the German chancellor is the go-to European leader for China, says Jonas Parello-Plesner of the European Council for Foreign Relations think-tank.

“The Chinese want to hear from the horse’s mouth what’s going on with the euro crisis – they view Merkel as the one with the purse,” he says. “It is a watershed moment for German diplomacy.”

In that context, Ms Merkel’s reticence to address claims that Chinese manufacturers are “dumping” solar equipment on the world markets is all the more surprising. The US government imposed punitive import tariffs on solar equipment from China this year, and the European Commission is considering whether it should follow suit.

Officials in Berlin say Germany has “no option of acting” until the Commission makes a decision. They are also aware of the danger of a trade war with China – which could see Germany’s carmakers, for example, suffer retribution for steps to shore up a small solar sector.

“But we have no indications we’re moving towards trade war,” one official says. “We’re very optimistic we’ll find a good solution.”

The solar issue comes as Berlin’s relations with China face scrutiny from others in the EU. Ms Merkel’s visit takes place just weeks before a China-EU summit, which has left some experts wondering who is representing who.

“Somebody has to show leadership, and she is showing it. But in the design of the EU, this role should have been played by the institutions and such leadership by a big member, however benign, will raise fears,” Mr Parello-Plesner says.

German officials insist that Ms Merkel’s diplomacy will “complement” that of Brussels. “We have a very strong interest in ensuring that the excellent relations between China and Germany do not develop at the expense of China-EU relations,” says one German diplomat in Beijing.

Insisting that Germany would be speaking for Europe as a whole, German officials say Ms Merkel will discuss the course of the European debt crisis, aware that Beijing’s currency reserves make it a major player on the global financial markets.

Officials hope “broad and deep” Sino-German ties will permit an “open discussion” about the civil war in Syria. One hope is to prise China from Russia’s side in blocking UN Security Council action against Bashar al-Assad, the Syrian president. “We’re talking about a mature relationship,” says one official in Berlin.