Germany Courts China

Over the years, as relations between China and the United States have grown more adversarial—from maritime clashes over the South China Sea to economic ones over currency manipulation—Europe, and in particular Germany, the continent’s de-facto leader, has been caught in the middle.

Over the past few decades, Germany has grown economically closer to China, often finding itself at odds with the United States, which has implied that Berlin is sucking up to Beijing and being too soft on China’s aggression in the South China Sea. It is true that roughly 45 percent of the EU’s exports to China come from Germany and that Germany accounts for 28 percent of EU imports from China, based on 2013 figures. And the Chinese are not slow to point out, as President Xi Jinping did last month, that every third container in the huge port of Hamburg is a Chinese one. There are also over 5,200 German companies registered in China and more than 900 Chinese firms registered in Germany. The United States is a much larger and more populous country than Germany, and there are many more American and Chinese companies registered in each other’s respective countries. But Germany has a relatively more balanced trade relationship with China than the United States does. It even registered a small surplus of 203 million euros as of February 2016. Meanwhile, the United States has been running a large and growing trade deficit with China since the mid-1980s.

This ever closer German-Chinese economic relationship has come with stronger political ties. During her ten years in office, German Chancellor Angela Merkel has embarked on eight official visits to China. Her ninth visit will take place in June. She will also make a visit to Hangzhou, Zhejiang, in September for the first China-hosted G-20 summit, a meeting of the world’s 20 largest economies. Merkel’s predecessors were also frequent visitors to China. Helmut Kohl traveled there four times during his 16 years as chancellor; Gerhard Schröder visited six times during his seven years in office.

In 2011, China and Germany held a joint meeting in Berlin, during which then Premier Wen Jiabao announced China’s intention to “establish a governmental mechanism for consultation and coordination with Germany to institutionalize our consultations.” What Wen meant was annual cabinet-level meetings between the two countries. Not even Washington enjoys this sort of special status with China, although since 2009 the two have held an annual forum, the Strategic and Economic Dialogue, designed to enhance their relationship. The German-Chinese government consultations commenced in October 2012, and in 2014, the entire Chinese cabinet accompanied Premier Li Keqiang to Berlin. The meeting involved discussing economic deals and partnerships in agriculture, sciences, the health sector, and the development of emission-free engines. Li also asked Merkel to accompany him on a trip to Hefei, the capital of Anhui Province, his home province. After all, he explained, they were “old friends.”

During the chancellor’s visit to China a year later, in October 2015, 13 major economic agreements were signed to the tune of more than 18 billion euros, including a roughly 13 billion euro deal involving China’s purchase of 130 Airbuses. The exchange operators Deutsche Boerse, the Shanghai Stock Exchange, and the China Financial Futures Exchange signed an agreement to trade yuan-dominated financial products. The China Europe International Exchange, which is headquartered in Frankfurt, commenced trading in November 2015. It was the first time that authorized yuan trading had taken place outside of mainland China. It was a clear sign that Beijing was keen on becoming fully integrated into the global financial markets and interested in further enhancing economic relations with Germany. In mid-June 2016, the German chancellor will bring at least seven cabinet ministers (as well as plenty of influential CEOs) on her visit to China.

In spite of Washington’s skepticism regarding Berlin’s so-called emerging special relationship with China, Germany has not been soft on Beijing. In fact, it provides a model for other mid-sized powers, and even for the United States, in demonstrating how to cooperate with China without antagonizing it, while adhering to its liberal democratic principles.

For example, in March 2016, when German President Joachim Gauck visited China, he did not mince words on Beijing’s record on human rights and social justice. Although he expressed his admiration and respect for the country’s economic success and cultural traditions, Gauck, in a major speech before students at Tongji University in Shanghai, criticized China’s lack of democratic legitimacy in frank but skillful terms.

Instead of attacking China directly, Gauck referred to his old country, the communist East Germany, explaining how the population was “neither happy nor free.” And the whole system, he outlined, “lacked something immensely important, namely legitimacy.” General elections that were “equal, free, and secret” did not exist. As a result, there was “a credibility deficit,” he said, “linked to a culture of mistrust between those that were governed and those who governed.” His mostly young audience could not help but draw a connection to the state of affairs in present-day China.

Gauck also mentioned the fall of the Berlin Wall in 1989 (while refraining from mentioning the Tiananmen Square clampdown), explaining that the “human desire for freedom in the end always breaks through.” Gauck also expressed his concern for China’s serious ecological problems, as well as the large and growing disparity between the rich and the poor. He worried about the fate of human rights activists, those who “seem to stand in the way of the official line.” When he spoke of German-Chinese relations that “cannot be viewed in isolation from China’s relations to Germany’s other important partners and allies,” Gauck was hinting that despite the closeness of German-Chinese relations, Berlin had not embarked on a “special path” with Beijing to the detriment of its Western partners.

Gauck traveled with German representatives from churches, cultural foundations, and labor unions, as well as Bärbel Kofler, the new representative for human rights in the German parliament. He met with a number of dissidents and human rights lawyers privately and pressed Xi personally to release political prisoners, such as the 20 human rights lawyers who remain imprisoned. This is in contrast to typical visits from other European leaders or the U.S. president, who tend to be accompanied by large numbers of CEOs and finance and economic experts rather than representatives from cultural and human rights institutions.

On the whole, Germany has been more effective in holding China’s ear than the United States and many other countries have been, because of the nuance and sensitivity with which it has broached sensitive subjects. Gauck’s own background as an anticommunist dissident and protestant pastor from the former East Germany has perhaps made this a little easier. Well schooled in Marxism-Leninism, he was able to point out the lack of inner logic in Chinese communism with the country’s leading politicians. For instance, he discussed with Liu Yunshan, China’s top propagandist, how the monopoly of the communist party could be reconciled with its democratic constitutional principles.

Of course, although Lui, President Xi, and his compatriots swallowed this critique without open resentment—especially since Beijing regarded the German president’s visit (the first in six years) as an important enhancement of China’s status—the Chinese-controlled media censored news about Gauck’s visit and his speeches. When the German embassy put the text of Gauck’s remarks at Tongji University on its website, it was soon blocked in China, although not after tens of thousands of copies had been downloaded.

Judging by previous visits to Beijing, in June, Merkel will also address the poor state of human rights in China and the increasingly repressive nature of the country’s police and law enforcement bodies. Merkel may also speak out against the controversial new NGO “management law” passed in April 2016, which will come into effect on January 1, 2017. The new law essentially hands the Chinese security forces control over all foreign NGOs that are operating in the country.

When broaching touchy subjects in the past, Merkel has been respectful and courteous but still firm. Her reception of the Dalai Lama at the chancellery in 2007 led to an icy period in German-Chinese relations. British Prime Minister David Cameron had a similar experience when he received the Dalai Lama in London five years later. Western politicians have thus become more cautious about raising human rights issues, often choosing to discuss them in private.

Still, during her visit to China in 2014, Merkel spoke at the elite Tsinghua University in Beijing and did not hesitate to be frank. “It’s important that citizens can believe in the power of the law, and not the law of the powerful,” she said. “You need on open, pluralistic, and free society in order to shape the future successfully.”

The chancellor, who, like Gauck, grew up in communist East Germany, also mentioned the events of 1989 when discussing her satisfaction with the Chinese-German discussions of rule of law and human rights. “To me, this [human rights] dialogue is very important because 25 years ago, when the peaceful revolution took place in the former German Democratic Republic, this finally led to the fall of the Berlin Wall and enabled us to have a free dialogue,” she said. “I think it’s also important here in China to have such a free dialogue.” These parts of her speech were censored in China.

During her June 2016 visit, Merkel will likely discuss China’s economic status. She will undoubtedly mention what efforts the Chinese governments still needs to make to be given market economy status by the World Trade Organization, one of Beijing’s most cherished objectives. It is less clear, however, whether Merkel will support China’s desire for a bilateral investment agreement with the EU. Although negotiations have begun, most European countries already have bilateral investment treaties with China and don’t see the urgency for one at the EU level. But an EU level treaty would enhance Beijing’s status, and, more important, would be the first step toward a comprehensive free trade agreement with the EU.

Any discussion of territorial and jurisdictional disputes in the South and East China Seas will most likely occur behind closed doors, allowing the German chancellor to better point out China’s unnecessarily aggressive behavior—which has antagonized most of China’s neighbors—without humiliating it on the world stage. Washington has a much more robust approach toward China on these matters. It frequently deploys ships and flies military aircraft over some of the islands and rocks that China claims as its sovereign territory, in order to challenge what it views as excessive maritime claims by Beijing and maintain access to and freedom of navigation in the South China Sea. Unlike France, the United Kingdom, and, of course, the United States, Berlin has no naval hardware in the South China Sea and is thus not directly involved in the adversarial situation there.

Both China and Germany are aware of their growing economic dependencies, as well as their reliance on each other to maintain geopolitical stability in Asia and beyond. The Germans, for example, have been pressing the Chinese to play a more constructive role in Syria. After all, China’s One Belt, One Road initiative to renew its old Silk Road will make it a bigger player in the Middle East. Its need for Middle Eastern oil, as well as the close links that the Uighurs, a Turkic Sunni minority in China’s northwestern region of Xinjiang, have to the Syrian conflict, make a settlement of the Syrian war in China’s interest. Although the Chinese have recently appointed a special diplomatic envoy to the Syrian peace talks, Beijing is still seen as much too supportive of Syrian President Bashar al-Assad, which are also the Russian and Iranian positions.

Whether Merkel’s powers of persuasion can convince China to influence Russia’s position on Syria remains to be seen. Crucially, Germany does not give China the impression that it wishes to “contain” its inevitable rise. Instead, Merkel has clearly shown her desire to fully integrate China into international economic, financial, legal, and political structures and institutions.

For example, Germany, along with the United Kingdom and 14 other European countries, decided to become founding members of the Asian Infrastructure Investment Bank, which Washington perceives as a rival to the World Bank. The United States attempted to undermine the AIIB’s creation, and when this failed, Washington grew indignant, and along with Japan and Canada, refused to join. Of course, that only enabled China to dominate the AIIB more forcefully. Even in Washington, there is recognition that the United States shot itself in the foot.

In the many conflicts that bedevil U.S.-Chinese relations, Germany has been able to steer a cautious middle course. There is indeed a global affairs lesson to be learned here on how to coexist peacefully: by having respectful, diplomatically fine-tuned, frank discussions, underpinned by a focus on mutual economic advantages and genuine attempts to include China into the international community.

Furthermore, regular, institutionalized transatlantic consultations regarding China’s role in global affairs would also be beneficial. At present, such consultations between Washington and Berlin (or with other EU members) are the exception. They should, perhaps, become the norm—not only for the sake of better U.S.-Chinese and transatlantic relations but for global stability.