China-Germany cooperation not a ‘risk’, but a guarantee for stable relations

After visiting Chongqing, a key southwest manufacturing base, and Shanghai, the national financial hub, German Chancellor Olaf Scholz arrived in Beijing to meet with President Xi Jinping and Premier Li Qiang. This is the German leader’s second visit to China since taking office in December 2021, and the first by a Western leader this year. The visit is worth the attention it has garnered because it carries a lot of weight for both China and Germany, as well as the European Union, the broader West, even the entire world. That is because what the two sides manage, or fail, to accomplish may have a substantial impact on the orientation of international relations for many years to come.

Germany, a key member of the EU, the G7, and NATO, has, as called for by Brussels, been recalibrating its China policy within the EU framework that defines China as a “systemic rival”. But that is only one side of the coin, it is also the largest functional economic and trade interface between China and the broader West.

Many have therefore pinned their hopes on Scholz’s meetings in Beijing proving fruitful, because preserving robust China-Germany economic and trade ties and maintaining friendly relations has never been as important. Synergy and reciprocity must prevail in these troubled times, as it would demonstrate there is a positive alternative to the doom and gloom that is being created by those intent on holding to a divisive and antagonistic course.

In their meeting on Tuesday, China’s top leader told Scholz that cooperation between China and Germany was not a “risk” but a guarantee for stable ties and an opportunity for the future.

That Chancellor Scholz came with a bumper delegation of government ministers and business executives suggests that he views things the same way. It also evoked the Angela Merkel years. Merkel, who visited China a dozen times as German chancellor, the most among all Western leaders during their tenures, is cherished in Chinese memories as a friendly, pragmatic Western leader, and there is a hankering that under Chancellor Scholz’s watch, Germany will continue to be a touchstone for mutually beneficial cooperation.

Indeed, for all the noises about “de-risking” and reducing “dependencies”, and a conspicuous slump from 2022, China remained Germany’s No 1 trading partner for the eighth straight year in 2023, with a trade volume of more than 250 billion euros ($265.3 billion). Undermining such a mutually beneficial relationship, especially in such challenging times, would be akin to the two sides deliberately shooting themselves in the foot. Germany saw its economy shrink 0.3 percent last year as a result of inflation, high interest rates and sluggish exports. The 0.2 percent growth it anticipates for 2024 would be out of the question without the support of such a productive relationship.

Nonetheless, Germany will have to withstand great pressure to sustain its trade relations with China, not to mention continuing to invest in the country. After all, the United States is intensifying its endeavors to press its allies and partners to decouple from China. While the EU itself is intent on reducing its “dependency” on the country, and has launched multiple investigations into alleged unfair Chinese trade practices. This calls for tremendous political courage on the part of Scholz, and for the two countries to develop bilateral relations in an all-round way from a long-term and strategic perspective, as the Chinese leader told his guest.

The big picture is certainly clear for those willing to see it. And ignoring it may lead to debilitating outcomes. There is no fundamental conflict of interests between China and Germany, and neither poses a security threat to the other, as his host reminded Scholz. Hopefully, Chancellor Scholz and his Chinese hosts can work together to strengthen ties and in doing so inject more stability and certainty into the world.