Covid-19 pandemic requires, the China-European Union summit initially scheduled in Leipzig on Monday, September 14, has been replaced by a four-way videoconference. Chinese President Xi Jinping, President of the European Commission Ursula von der Leyen, Head of the European Council Charles Michel, and German Chancellor Angela Merkel, whose country holds the six-monthly presidency of the EU, will be posted behind their screens.
Restricted in scope, this mini-summit should however allow Europe, according to Angela Merkel to ” speak with one voice Against a difficult Chinese partner. Political crisis in Hong Kong, confinement of Uyghur populations in Xinjiang, difficulties for expatriates to return to work in China since the pandemic, “ebetween China and the Europeans, tensions are increasing »Admits Mikko Huotari, director of the Berlin research center Merics, specializing in China.
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On the menu for this Monday’s debates are the climate, the Covid-19 pandemic but also and above all trade relations. After seven years of negotiations, China would like to get an investment deal with the EU by the end of December. The Europeans do not believe it, given the lack of progress from Beijing in the fields of intellectual property and the opening of public markets.
Germany on the front line
In this context, Berlin’s hitherto very cautious position towards Beijing – which is its largest trading partner, ahead of the United States and the European Union – is changing. Motivated in part by the economic crisis and its rotating EU presidency, Germany is now the leading country standing up to China.
Economy Minister Peter Altmaier promotes the EU’s industrial and economic sovereignty and campaigns for a diversification of supply chains, as the country’s dependence on China has been exposed by the coronavirus crisis . In Berlin, the tone has become openly more critical and direct, on economic and even political issues.
« In the past, the two countries had a relationship based on their common interests, especially economic ones, explains Mikko Huotari, from the Mercator center in Berlin. We see a substantial change in the German approach, which s‘has been accelerating in recent months but which had started at least four years ago. For Germany, the wake-up call rang in 2016 with the massive wave of Chinese investment in the country », Summarizes this expert.
The Chinese offensive
That year, in fact, Germany fell from the clouds as it helplessly watched the takeover of its industrial gem, Kuka, by the washing machine manufacturer Midea. Other examples will follow, such as the acquisition of machine tool manufacturer KraussMaffei by ChemChina and energy company EEW by Beijing Entreprise. In total, the Chinese will have invested more than 13 billion euros in Germany in 2017.
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In the process, the government of Angela Merkel takes a measure clearly directed against Beijing. It amends its investment protection law. It can now prevent the purchase by a foreign company of 10% of the capital of a company if this involves national security or the so-called critical infrastructures. The same year, Berlin blocked the takeover of the semiconductor specialist Aixtron by Fujian Grand Chip Investment Fund.
The government is also investing more in joint investment projects at European level in the areas of “cloud”, artificial intelligence and the production of battery cells. The projects could soon concern space and hydrogen. It remains to convince German companies to participate, we recognize on the French side, while many players still prefer to establish their own partnerships, sometimes even with Chinese.
A partner who remains essential
However, Berlin’s change of position still looks like a balancing act. The country wishes to maintain its position as a major economic player in China, while increasing partnerships with other Asian countries, in particular with the Indo-Pacific zone, which includes India and Australia.
A real snub to Beijing. ” Berlin wants to diversify its economic partnerships but has no intention of withdrawing from China, the world’s second largest economy, relativise Mikko Huotari. China remains essential for Germany and for other European countries ».