Rec­i­proc­ity key to Sino-Ger­man co­op­er­a­tion

China Daily (Hong Kong) - - COMMENT -

The world me­dia’s at­ten­tion is fo­cused on the on-go­ing G20 Lead­ers Sum­mit in Ham­burg, Ger­many. But there seems to be lit­tle mo­men­tum go­ing into Ham­burg. The air has been let out of the global sum­mitry bal­loon.

Last year, China as the sum­mit host had the good for­tune of build­ing on the Paris cli­mate change agree­ment adopted in De­cem­ber 2015 and signed in April 2016. China also did a lot of ad­vanced di­plo­macy, and in­vested heav­ily in the gala.

This time, the gov­ern­ments of many of the lead­ing economies are fo­cused in­stead on do­mes­tic is­sues. The big­gest de­fla­tor is the United States, where Pres­i­dent Don­ald Trump’s fix­a­tion on putting “Amer­ica First” and pref­er­ence for stateto-state bar­gain­ing have left the US in a spoiler role.

Trump’s de­ci­sion to pull his na­tion out of the world com­pact on cli­mate change was not re­ceived hap­pily by the G20 host and chair Ger­many.

Brexit and the dis­as­trous elec­toral re­sult for the rul­ing Bri­tish Con­ser­va­tive Party have left the United King­dom in a po­si­tion of di­min­ish­ing sig­nif­i­cance go­ing into the sum­mit. It is a long way from the heady days of Gor­don Brown, former Bri­tish prime min­is­ter, lead­ing the global charge into the Lon­don G20 in April 2009.

The on-go­ing do­mes­tic trou­bles in a num­ber of the emerg­ing economies have meant the loss of some of the new dy­namism in global gov­er­nance of the last decade. South Africa, to its credit, is still try­ing to strengthen com­mit­ments on African de­vel­op­ment in Ham­burg.

Canada and Aus­tralia, the tra­di­tional mid­dle pow­ers, are in wait-and-see mode, de­spite their ac­tivist sound­ing diplo­matic rhetoric.

It is not sur­pris­ing, there­fore, that hope for the sum­mit has been pinned on Ger­many and China, and whether they can in­ject some mo­men­tum. The good news is that the truly trans­for­ma­tive struc­tural changes that China and Ger­many are bring­ing to the world are al­ready hap­pen­ing, and have been go­ing on for four decades. These changes have un­pinned the tran­si­tion to a mul­ti­po­lar world, and are of much greater sig­nif­i­cance than G20 sum­mits.

Since the 1980s, Ger­man cor­po­ra­tions, small, medium and large, have shown them­selves to be some of the most proac­tive and com­mit­ted part­ners to China. Volk­swa­gen, Siemens, BASF, Lufthansa and many other small and medium-sized Ger­man com­pa­nies started in­vest­ing when China was far from be­ing the “world’s fac­tory”. They have been in­te­gral in­gre­di­ents in China’s suc­cess.

Ger­many, from the era of former chan­cel­lor Hel­mut Sch­midt to in­cum­bent Chan­cel­lor An­gela Merkel to­day, has proven it­self to be an ex­cep­tion­ally re­li­able and com­mit­ted part­ner of China. Few other coun­tries, in­clud­ing my own (Canada) can match the Ger­man record.

More re­cently, Ger­many has also dis­tin­guished it­self by work­ing with China on in­ter­na­tional cur­rency. It may come as a sur­prise to ca­sual ob­servers that Bei­jing has been one of the most re­li­able part­ners to eu­ro­zone. In re­turn, Merkel ex­pressed her coun­try’s grat­i­tude, stand­ing be­side Chi­nese Pres­i­dent Xi Jin­ping in Frankfurt, in March 2014, and de­clared Ger­many’s sup­port in in­ter­na­tion­al­iz­ing China’s cur­rency, the ren­minbi.

For the Ham­burg sum­mit, Bei­jing and Ber­lin have pledged to en­sure con­sis­tency be­tween the agen­das and out­comes of last year’s sum­mit in Hangzhou and those of the on-go­ing one.

Bei­jing has de­clared that it will spare no ef­fort in help­ing the Ham­burg sum­mit achieve suc­cess, and to strengthen China-Ger­many co­op­er­a­tion un­der the G20 frame­work.

In early June, Merkel said Ger­many must ex­pand its part­ner­ship with China in a “time of global in­se­cu­rity”. Both coun­tries want to send a “clear sig­nal” about their shared de­sire to main­tain an open world econ­omy, free trade and glob­al­iza­tion, though in a fairer di­rec­tion. They both want to en­cour­age the G20 coun­tries to speed up the im­ple­men­ta­tion of the Paris cli­mate change ac­cord, the 2030 Agenda for Sus­tain­able De­vel­op­ment, and to sup­port African de­vel­op­ment.

Iron­i­cally, the G20 sum­mits tend to gain some rel­e­vancy when the hosts can tie the agenda to the deeper na­tional in­ter­ests of the ma­jor G20 mem­ber states. For in­stance, one of the more sig­nif­i­cant out­comes from last year’s Hangzhou sum­mit was the strate­gic work of the Green Fi­nance Study Group. How­ever, China’s world lead­ing is­suance of green bonds is due to the fact that Bei­jing is com­mit­ted to green fi­nance re­gard­less of whether or not there is a “G20”.

Ger­many as the G20 chair is hes­i­tant to spend fur­ther after mil­lions of mi­grants ar­rived in Ger­many over the past three years, and with the do­mes­tic elec­tion com­ing in early fall.

De­spite these lim­i­ta­tions for Ber­lin, Ham­burg is an op­por­tu­nity for Bei­jing to not only sup­port the Ger­man G20 chair, but also to smooth over the bi­lat­eral trade and in­vest­ment ten­sions with Ger­many.

The Sino-Ger­man re­la­tion­ship needs to be put back onto more sus­tain­able and strate­gic foot­ing if Ger­many and China are to help man­age the new un­cer­tain mul­ti­po­lar world. This means ad­dress­ing the al­leged dis­crim­i­na­tion that Ger­man com­pa­nies ex­pe­ri­ence in China, and limited ac­cess to Chi­nese mar­kets for Ger­man ex­porters. The watch­word is “rec­i­proc­ity”.

The au­thor is an as­so­ciate pro­fes­sor of Po­lit­i­cal Econ­omy at York Univer­sity, Canada.

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