German Chancellor Olaf Scholz’s visit to China generated a flurry of comments on the tension between Europe and China. In addition, Chinese leader Xi Jinping used the occasion to affirm his foreign policy towards Europe after he was appointed to a third term as communist party secretary.

The German Chancellor’s stay will be brief—less than 24 hours. However, he is the first European leader to visit China after 2019.

One of the most important issues discussed by the political leaders was the Russian-Ukrainian war. Beijing backs Moscow, despite pretending some neutrality before the UN, although refraining from voting against Russia. Xi Jinping has communicated his wish that Putin does not aggravate the conflict and that it can be solved through diplomacy.

In addition, the German chancellor asked the Chinese leader to exert his influence on Putin to bring the Russian-Ukrainian war to an end.

“I told the (Chinese) president that it is relevant for China to exert its influence on Russia,” the German chancellor told reporters. “Russia must immediately stop the attacks on the civilian population on a daily basis and withdraw from Ukraine,” he added.

According to Chinese state media, Xi responded that China “supports Germany and the EU to play an important role in promoting peace talks and encouraging the construction of a balanced, effective and sustainable European security framework.”

Chancellor Scholz is visiting China accompanied by a delegation of German businessmen from Volkswagen AG, BASF, and other companies.

In an interview with German media, the chancellor said he was willing to confront China’s controversial issues, such as “respect for civil and political liberties, and the rights of ethnic minorities,” also mentioning Taiwan. Scholz stated that Germany and other countries follow the “one China” policy and do not recognize the island nation’s independence. He noted that changing the “status quo” could only be achieved through “peaceful and mutually agreed means.”

Another critical point in bilateral relations is China’s investment in a port terminal in Hamburg. Recently, the German government authorized COSCO (China Ocean Shipping Company) to invest in one of Europe’s largest ports.

The participation of the world’s third-largest Chinese shipping company and state-owned company in the German port sparked controversy in Germany and the United States.

From Washington, pressure was exerted on Berlin to limit the sale of its shares to COSCO. An American official, who asked not to be identified, assured that the U.S. embassy communicated clearly that it strongly recommended that there should be no Chinese participation in port investments.

That triggered an aggressive response from the Chinese Foreign Ministry. The ministry spokesman said that the U.S. has “no right” to interfere between China and Germany.

In a typical counter-offensive by the communist regime, the ministry spokesman said, “Practical cooperation between China and Germany is a matter of the two sovereign countries, and the U.S. should not attack without reason and has no right to interfere,” a day before German Chancellor Olaf Schulz arrived in Beijing.

The German Chancellor’s trip sparked mixed reactions, especially from the European community. The European Commissioner for Internal Market and Services from 2019, Thierry Breton, warned that “the era of naivety [with China] is over. The European market is open, with conditions.” However, he added that European companies that want to invest in China have to do so at their own risk and be aware that they are doing business in a country that is becoming increasingly authoritarian.

Breton’s comments pointed to the abnormal situation for doing business in China facing European companies.

Businessmen from Volkswagen and BASF are part of the German chancellor’s entourage, which includes other senior business executives from 12 German companies in the automotive, manufacturing, chemical, pharmaceutical, and food sectors.

BASF intends to relocate many of its factories from Europe to China. However, Thierry Breton commented, “there are uncertainties for companies making this bet…. There is a very important advantage in having their headquarters in Europe, with the rule of law, protection of the company and visibility,” he said.

Volkswagen was recently involved in controversy over a factory in the Xinjiang region, home to ethnic Uighurs persecuted by China’s Communist Party (CCP). According to the German automaker, the factory was installed more than 10 years ago for economic purposes and is unrelated to the Uyghur conflict.

Human rights organizations and Uyghur organizations asked Volkswagen to withdraw the factory from the region in support of the Uyghurs. The German company refused.

Business ties between China and Germany are close; almost half of the European investment in China is by German companies. Thanks to this, together with Angela Merkel’s diplomacy, Germany steered Europe’s foreign policy toward China.

However, in the post-pandemic era, the landscape changed. As a sign of this, the German chancellor said he wants equality for German and Chinese companies, “We firmly believe that there should be a level playing field, that German companies should not experience greater difficulties in China than Chinese companies have in Europe…. I believe this will lead to breakthroughs in many concrete cases in the near future,” adding that he was not only referring to German companies but to all European companies.

The European Union is looking at bilateral relations with China from another perspective. Several EU member countries are concerned about the growing influence of communist China on Europe. Investments in infrastructure such as ports and roads sound warning alarms and awaken Europe from its complacency towards the CCP.

EU President Ursula Von der Leyen said, “we have made strategic mistakes in the past by selling infrastructure to China.” Moreover, after a recent summit in Brussels, she stressed that member states “must be very vigilant about who we depend on,” especially in critical infrastructure, raw materials, and energy.

The CCP is well aware of the pressure Europe exerts on Germany, which is why Xi Jinping told Scholz today that Germany should not be swayed by “bloc confrontations” and “attempts to see everything through the prism of ideology.”

“China always regards Europe as a comprehensive strategic partner, supports the strategic autonomy of the European Union, hopes to see a stable and prosperous Europe, and insists that China-Europe relations are not directed, subjugated or controlled by any third party,” Xi said.

Germany is following China closely. Will the rest of Europe follow in its footsteps?

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