Chancellor Olaf Scholz of Germany tried to strike a delicate balance on a trip to China this week, promoting business ties with his country’s biggest trading partner while raising concerns over its surge of exports to Europe and its support for Russia.
Mr. Scholz met with China’s top leader, Xi Jinping, at the Diaoyutai State Guesthouse in Beijing on Tuesday, the culmination of a three-day visit with a delegation of German officials and business leaders. He also met with Premier Li Qiang as the two countries navigate relations strained by Russia’s war in Ukraine and China’s rivalry with the United States, Germany’s most important ally.
Throughout his trip, Mr. Scholz promoted the interests of German companies that are finding it increasingly hard to compete in China. And he conveyed growing concern in the European Union that the region’s market is becoming a dumping ground for Chinese goods produced at a loss.
But Mr. Scholz chose a conciliatory tone over a combative one in his opening remarks before sitting down with Mr. Xi on Tuesday morning, in a meeting that stretched over three hours and turned into a walk and lunch.
It was the German leader’s first visit to China since his government adopted a strategy last year that defined the Asian power as a “partner, competitor and systemic rival,” calling on Germany to reduce its dependency on Chinese goods.
Germany’s economy shrank last year, and its weaknesses have exposed a reliance on China for growth. Energy prices have risen because of the war in Ukraine, which has been facilitated by Beijing’s support for the Kremlin. German companies have pushed for more access to China and complained that they face unfair competition.
The chancellor visited German companies with extensive investments in China and met with trade representatives and officials in the sprawling industrial metropolis of Chongqing in China’s southwest and in Shanghai and Beijing.
At a talk with a group of students in Shanghai on Monday, Mr. Scholz fielded a question from a student who planned to study in Germany this year, who said he was “really worried” because the country had partially legalized cannabis. “When you study in Berlin, you can run around the whole time and never meet anyone who does that,” the chancellor assured him.
But he also used the platform to push more serious messages about trade. “Competition must be fair,” Mr. Scholz told the students. “We want a level playing field,” he said.
Mr. Scholz’s trip was an example of the difficult dance that Germany is trying to do: maintaining economic ties with China while managing U.S. pressure to align itself more closely with Washington against Beijing.
In his meetings, Mr. Scholz highlighted Germany’s commitment to doing business with China, but he also warned that Beijing had to curb the flood of Chinese goods into Europe. At the same time, he expressed reservations about the European Union’s investigations into China’s use of subsidies for green technology industries, saying that any discussion about trade must be based on fairness.
“This must be done from a position of self-confident competitiveness and not from protectionist motives,” Mr. Scholz told reporters on Monday.
China’s manufacturing push in green sectors like electric cars and solar panels has touched off trade disputes with Europe and the United States, where such industries have also received government support. But with 5,000 German companies active in the Chinese market, Germany stands to lose more than many of its European partners would if Beijing were to retaliate against the European Union.
“If the E.U. goes too hard against China, we could expect countermeasures and this would be a catastrophe for us,” said Maximilian Butek, the executive director of the German Chamber of Commerce in China.
“For us it’s extremely important that the Chinese market remains open,” he said.
In his meeting with Mr. Xi, Mr. Scholz…
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