// investNai

Germany China: why Scholz’s journey seems to be out of step for the EU


But his trip sparked controversy in Germany and concern elsewhere in Europe.

It follows the National Congress of the Communist Party of China.

President Xi used it to consolidate his power and fill his leadership team with allies.

An extraordinary and bitter row recently erupted at the top of the German government when it was revealed that a Chinese company was set to acquire a significant stake in part of the Port of Hamburg.

No less than six government ministers reacted angrily. The deal, they said, would give China significant influence over critical German infrastructure. The German security services also urged caution.

But the German Chancellor insisted that the deal go through. He reportedly pushed for a deal, albeit one that limited the size and influence of the stake to 24.9%.

Nobody knows exactly why he seemed so determined. Mr. Scholz, the former mayor of Hamburg, remains close to the city authorities who said the deal represented a vital investment.

But numerous other commentators suspect a second reason; that Olaf Scholz did not want to appear in Beijing without a “gift” for Xi Jinping.

This raised eyebrows and concerns.

As well as the Chancellor’s decision to bring in a delegation of German businessmen. This was the standard practice of her 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.

“The signal being sent is that we want to expand and intensify our economic cooperation – this needs to be questioned,” said Felix Banazsak, a Green Party politician who is a partner in Scholz’s coalition government.

The Greens have long sought a tougher line against China. Just a few days ago, the party’s foreign minister, Annalena Baerbock, sternly and publicly reminded him that her government was coming to power and promised to adjust her Chinese strategy. Banazsak says his country needs to learn from its past dependence on Russian energy: “We need to make ourselves as independent as possible from individual states, especially if they are states that don’t share our values.”

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 even as Germany imports more than it exports.

More than a million German jobs depend on this relationship. Take, for example, auto giant Daimler, which sells more than a third of its vehicles in China.

In the first half of this year, German companies invested more in China than ever before. Chemical company BASF has just opened a new plant in southern China and plans to invest € 10 billion (£ 8.6 billion; $ 9.9 billion) in the site by the end of this decade.

On the eve of the visit, the head of the German Automotive Industry Association stressed Germany’s dependence on China for raw materials and warned that “decoupling” would be an economic and geostrategic mistake.

Even her peer from the Association of Small and Medium Enterprises has advised against a sudden change of course: “the advice can only be not to crush the Chinese porcelain now”.

Chancellor Scholz will spend less than 12 hours in Beijing. His goal, he said ahead of his trip, is to find out how much cooperation is still possible – because “the world needs China” in the fight against the global pandemic and climate change.

“If China changes, then the way we deal with China must also change,” he said.

Many in Berlin and beyond will be looking for evidence that Mr. Scholz’s response to a changing China could yet become the crucial test of his chancellery.