China-German Relations Warming Up for Better or Worse?

On June 12, German Chancellor Angela Merkel arrived in China to co-chair intergovernmental consultations with Chinese Premier Li Keqiang (李克強) the next day. Officials from 26 government agencies from both countries attended, Xinhua News Agency reported.

The two countries have agreed to work on a political settlement in Syria, strengthen dialogue on Afghanistan, work under the G20 framework on sustainable and balanced growth of the world economy, and continue to promote China-EU relations, Xinhua reported.

The China Internet Information Center, a government website, said a total of 96 contracts worth US$15 billion were signed between Chinese and German companies.

The contracts involved Blackstone Group selling its majority stake in WindMW, the owner of one of Germany’s largest wind farms, to Three Gorges Corp, Bloomberg reported. The International Business Times also reported that Airbus Helicopters has confirmed an order for 100 light helicopters, a contract which was linked to setting up an assembly line in Shandong.

Despite the many trade deals, Merkel also addressed contentious issues between China and the EU.

Developments such as Tata Steel's exit from Port Talbot in the U.K have seen China come under fire recently for its role in the steel market. Global steel competitors often accuse China of dumping cheap steel on global markets amid dwindling domestic demand.

While speaking at Beijing University, Merkel emphasized the need to have a “level playing field” in steel trade. She said that while no one in the EU sought a trade war, there were still concerns over whether the EU could defend itself against subsidized Chinese goods.

Merkel also commented on a new law that will go into effect on Jan. 1 next year which will grant broad powers to Chinese police to question, monitor, regulate, and shut down NGO workers and organizations. German NGOs have complained the new laws will hamper their work in China. Merkel said she would work on continued dialogue with the Chinese government to ensure the new laws do not affect the work of NGOs, Reuters reported.

An opinion article on German broadcaster Deutsche Welle noted the oppressive nature of the Chinese government and dismissed the benefits from the trade deal due to the uncertainty foreign businesses face in China around intellectual property theft and free market access.