Scholz in China dumps Brussels and bows to the interests of German and Chinese industrialists

German Chancellor Olaf Scholz's three-day visit to China , hailed by Beijing as a success, may have exposed the European Union's divisions over how to engage with China and will almost certainly spark discussions upon his return.

At a news conference in the Chinese capital on Tuesday evening, Scholz said meetings with Chinese President Xi Jinping and Premier Li Qiang had been "calm, careful and honest".

Scholz called for "pragmatic" economic relations with China and said he had raised Western concerns that China was increasing its supply of dual-use military goods to Russian forces after Russia's invasion of Ukraine. of Moscow in 2022. He will certainly be supported by Brussels and Washington on this, but his words are unlikely to have any effect on Sino-Russian trade.

“For me, it is important to clarify that there is an urgent need not to supply weapons to Russia. But of course the issue of dual use is also part of this problem. It was possible to raise all the necessary issues in a way that cannot be misunderstood,” said the Chancellor, who declined to comment on whether he had obtained new commitments from Xi, underlining that he asked, but the other did not respond .

A day earlier, he had politely called on Beijing to address economic problems, including intellectual property theft and overcapacity. “Competition must be fair,” Scholz said in a speech to students in Shanghai on Monday, in rhetoric far from the tough approach favored in Brussels these days. “We want a level playing field, of course we want our businesses to have no restrictions.”

However, having dealt with these two themes common to the Western allies, it seems that the paths have then changed

Scholz and Germany go their own way, not caring about Brussels and Washington

The Social Democrat refused to say whether he agreed with EU and US claims that China was "dumping cheap green technology products onto the global market". “It is obvious that we need to discuss the issue of overcapacity, that we need to discuss grant tenders, which is an essential topic because the issue of grants is found all over the world,” Scholz said.

“It is important to be very pragmatic when discussing these issues. My hope is that this will quickly translate into concrete facts." Germany is well aware that, without low-cost Chinese products, from solar panels to heat pumps, it would be impossible to achieve the environmental goals that the German elites have set for themselves.

That's not enough: while the European Commission launched an investigation into subsidies in the electric vehicle sector in China, Scholz's delegation signed "a joint declaration of intent on dialogue and cooperation in the field of automated and connected driving " with their Chinese counterparts.

This will pave the way for the invasion of the European market with low-cost Chinese self-driving taxis that will not only crowd out Western cars, but will destroy entire job categories in Europe. However, because perhaps they will contain some German components or will be managed by German multinationals, then they will be fine.

The tone and activity will have pleased the delegation of high-level German industrialists – many representing automotive companies – who traveled with Scholz.

opening, On the eve of the trip, Volkswagen announced a new investment of $2.67 billion in its manufacturing and innovation center in Hefei, in China's Anhui province, and during the visit executives discouraged a confrontational approach with China .

“What we cannot use as an exporting nation are the growing trade barriers,” Mercedes boss Ola Källenius told German public broadcaster ARD. BMW CEO Oliver Zipse said he sees "more opportunities than risks", adding that there should be no barriers against Chinese electric cars.

“We don't feel threatened. This time too, we must not exaggerate our fear of foreign producers. We are confident we will be competitive,” Zipse said.

Andreas Rade, director general of the German Automotive Industry Association (VDA), issued a statement ahead of Scholz's trip, criticizing Brussels' decision to investigate Chinese EVs for failing to coordinate sufficiently with EU capitals.

In public comments before and after the meeting with Xi, the Chancellor refused to support Brussels' de-risking agenda and focused mainly on German business interests. Previously, he expressed skepticism about the EV probe.
His rhetoric was noticeably softer than that of Brussels. In a speech last week, EU competition chief Margrethe Vestager said the bloc must consider the "reliability" of clean technology imports from China.

Cora Jungbluth, a China expert at the Bertelsmann think tank near Bielefeld, criticized Scholz for not inviting the Federation of German Industries (BDI), a pressure group that helped shape the EU's triptych approach, which sees China simultaneously as partner, competitor and rival. This invitation was clearly omitted so as not to irritate the Chinese counterpart.

Beijing has increasingly more power over Germany, precisely because of its ties with German companies, if not because of Chinese control over many relevant companies. Suffice it to note that Mercedes is almost 20% owned by Chinese companies, BAIC and the Tenacious fund.

Under these conditions Scholz transforms into Merkel. that is, in one who is always ready for commercial agreements, at any cost and without considering the internal and external consequences.

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The article Scholz in China dumps Brussels and bows to the interests of German and Chinese industrialists comes from Economic Scenarios .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/scholz-in-cina-scarica-bruxelles-e-si-piega-agli-interessi-degli-industriali-tedeschi-e-cinesi/ on Wed, 17 Apr 2024 09:00:30 +0000.