German
Foreign Policy
A Foreign Policy Conundrum: Merkel and the EU
Trapped between China and the U.S.
Merkel and the EU Trapped between China and the U.S.
Tensions between the U.S. and China are on the rise,
with Germany and Europe stuck in the middle. German Chancellor Angela Merkel
would like to find a solution, but plenty of hurdles stand in the way.
By
Christiane Hoffmann, Peter Müller, Christoph Schult und Gerald Traufetter
04.06.2020,
17.57 Uhr
She wants
the summit to take place no matter what. Last Wednesday, German Chancellor
Angela Merkel held a video conference with political group leaders from the
European Parliament to discuss Germany's upcoming European Council presidency,
which begins in July. For six months, Berlin will be setting the agenda for the
European Union, and it has long been clear that Merkel views China as the top
foreign policy priority. Indeed, she has planned a large summit in Leipzig from
Sept. 13-15, to be attended by heads of state and government from the EU along
with Chinese President Xi Jinping.
In the
video conference last Wednesday, Green Party parliamentary group leader Ska
Keller wanted to know if the plan should perhaps be reconsidered given China's
violations of international law in tightening its grip on Hong Kong. But Merkel
doesn't even want to get involved in that discussion and she avoided the
question. Ultimately, it is clear: The EU approach to China is to be the
foreign policy cornerstone of Germany's council presidency. Period.
Never
before in the history of the bloc have all 27 EU leaders conferred as a group
with a foreign head of state. And now, the first ever such consultation will
not be with the president of the United States - the NATO partner and guarantor
of European security – but with the president of the authoritarian People's
Republic of China.
The summit
would thus be a symbol for how international influence and alliances are
currently shifting in a world order that is increasingly defined by the
competition between the U.S. and China. The September meeting would define
Europe's and Germany's role in that rivalry – not, of course, at China's side,
but in intensive dialogue with Beijing and at a significant distance from Germany's
traditional American allies.
The
coronavirus pandemic has accelerated developments that have long been apparent:
the U.S. retreat from the international stage; China's naked power grab; the
growing confrontation between the two powers; and their ruthless reliance on
propaganda to influence the rest of the world. "COVID-19 has raised the
temperature between the U.S. and China. The West's vulnerability has
grown," says one high-ranking German official.
From the
German perspective, alienation from the Trump-led U.S. continues apace. On the
one hand. On the other, though, China's is becoming increasingly self-confident
as it seeks to expand its influence and, in Hong Kong, Beijing is issuing a
direct challenge to the West. Europeans must recognize "China's
determination to claim a leading role," the chancellor said in a video
address to the Konrad Adenauer Foundation, the think tank connected to Merkel's
center-right Christian Democratic Union (CDU).
Not a Fan
Germany and
Europe are trying to identify their role between a formal ally that is behaving
less and less like a partner, and an authoritarian hegemonial power that can't
be considered a partner at all. At the same time, the pressure is growing to
join one side or the other. In Berlin, concern is on the rise that Washington
could deliver an ultimatum to Germany and the EU: Either you are with us or
against us. "The U.S. demands fealty on China policy, but we don't have
that on offer," says Niels Annen, a member of the center-left Social Democrats
who is state minister in the German Foreign Ministry.
Berlin is
also not a fan of Trump's efforts to isolate China. The U.S. president even
threatened recently to cut off all relations with China. And Germany is not
prepared to join in with a policy of "decoupling." "In a
globalized and networked world, isolation is not the correct instrument,"
says Economy Minister Peter Altmaier of the CDU. He is echoed by Norbert
Röttgen (CDU), chair of the Foreign Affairs Committee in German parliament. "A
policy aimed at isolating China is not in Germany's or Europe's
interests," he says.
Merkel's
desire to define Europe's position between China and the U.S. has become more
difficult as a result of corona, but it has also become more urgent.
"Europe must finally develop a joint China policy," Röttgen demands.
That was
precisely Merkel's plan: In a months-long coordination process, European
countries were to compare and coordinate their positions on China in an effort
to develop a joint approach. At the same time, the investment agreement with
China, which has been under negotiation for years, was to finally be completed.
But then the coronavirus arrived.
A visit by
European Commission President Ursula von der Leyen to China was cancelled, with
the meeting now to be held via video link at the end of June. But the
envisioned development of a joint European policy can no longer be made up for.
It is,
however, badly needed. The approach to China is different from country to
country in the EU. In March 2019, to be sure, European leaders agreed that the
EU would consider China both as a "strategic partner" and as a
"systemic rival." For many EU member states, however, particularly
those in Eastern and Southern Europe, the emphasis has clearly been on seeing
China as a trading partner. Chinese investments in countries like Greece and
Italy have been more than welcome. Meanwhile, Hungarian Prime Minister Viktor
Orbán finds not only China's economic model attractive, but also the country's
authoritarian societal model.
Playing on
Eastern European Sensitivities
France and
Germany, by contrast, are interested in protecting European companies from
Chinese companies. In Brussels, too, concerns are growing about the political
influence that Beijing is buying.
It is a
divide that China is actively trying to widen. Since 2012, for example, the
Chinese prime minister has been meeting annually with a group of leaders from
Eastern and Central Europe - a group that has grown to include the leaders of
17 countries, including Poland, Hungary and Greece. The cooperation is
primarily aimed at expanding trade as part of Beijing's Belt and Road
Initiative, frequently called the "New Silk Road."
But it also
serves to play on Eastern European sensitivities, a region that often feels
ignored by an EU dominated by France and Germany. China was also able to
cleverly use the coronavirus pandemic to its own foreign policy advantage. By
delivering urgently needed protective clothing to Italy and other countries,
China scored a public relations victory at a time when Germany had issued a
temporary ban on exporting such materials to its EU partners.
China is
now in a position to translate its diplomatic and economic engagement in Europe
into political influence. In June 2017, for example, a passage on investment
protection in an EU summit declaration was weakened at the insistence of the
Czech Republic and Greece, two member states with tight ties to China.
The EU
leadership duo of Commission President von der Leyen and Council President
Charles Michel has thus far failed to develop a clear course on China. And
recently, Brussels has succumbed to Chinese pressure on a number of occasions.
The EU ambassador in Beijing, for example, agreed to strike an allegedly
China-critical passage from an op-ed piece he had written with ambassadors from
the 27 EU member states for publication in the state-run newspaper China Daily.
And in a report compiled by the European Union External Action Service about
coronavirus-related disinformation coming from China, some of the most direct
criticism was redacted.
The risk
that the EU could prove as divided as ever at the September summit in Leipzig
has also grown because Merkel won't likely have any successes to present. There
simply hasn't been an opportunity to adequately prepare. Germany's most
important goal, that of signing the investment deal, doesn't look achievable by
September, despite the seven years of negotiating that has already taken place.
The deal is to replace bilateral agreements on the mutual protection of
investments.
Berlin has
even begun threatening to cancel the summit altogether if Beijing doesn't
demonstrate a willingness to compromise. State Minister Annen says that the
determination as to whether the summit will go forward or not isn't solely
dependent on the coronavirus situation, but also on the leadership in Beijing.
China must show movement on the investment deal, he says. One alternative under
discussion is to postpone the summit.
European
Trade Commissioner Phil Hogan also warns that China must demonstrate a greater
desire to overcome the current differences. "The EU wants a deal that is
worth the effort," he says. The EU's priorities are well-known, he says,
including greater balance when it comes to market access, equal investment
conditions and the sustainable development of economic ties.
Willingness
to Compromise?
Currently,
though, there are no indications that an agreement on the treaty is imminent.
On the contrary: "It will be the end of the year at the earliest," says
an official who is familiar with the negotiations. Bernd Lange, an SPD member
who is chair of the International Trade Committee in European Parliament, also
believes the idea that a "treaty will be ready for signing in Leipzig is
an illusion." The best-case scenario, he believes, would be "a
political agreement in certain economic sectors, such as automobile
manufacturing."
Another
issue on which Merkel would like to make progress with China is climate
protection. In Davos in mid-January, Merkel was enthusiastic about the idea of
linking the European emissions trading system with that of China, saying doing
so would "cover a huge portion of the world." But because of the
coronavirus, the UN climate summit that had been scheduled for November in
Glasgow has been postponed. Across the world, saving the economy has been
elevated above saving the climate on the priority list. Meanwhile, China's
willingness to compromise has shrunk, with the country still deeply invested in
coal.
Both Berlin
and Brussels believe that the only person who can save the China-EU summit is
the woman who wants it so badly: Angela Merkel. She is the only European
politician who is thought to have a modicum of influence in Beijing, primarily
because of her direct ties with President Xi Jinping. It remains unclear,
though, whether Merkel will still make her 13th visit to China this summer as
planned.
The respect
for Merkel within the Beijing power apparatus is also rooted in the fact that
the German chancellor has tended to choose more moderate tones when criticizing
the country's human rights violations. She believes that if they are to have
any effect at all, appeals should be made behind closed doors. But this kind of
backroom diplomacy has also become more difficult as a result of the
coronavirus.
The German
government has consistently rejected demands from Washington to adopt a more
confrontative approach to Beijing because it is simply not in Germany's
national interest. Germany, after all, isn't just dependent on China as its largest
trade partner. Berlin also sees the country as a vital partner when it comes to
solving international crises and global problems. A European refusal to engage
in dialogue, it is said in Berlin, does nothing to help the human rights
situation.
Escalation
of Tensions
Plus,
Beijing is needed at the moment in the battle against COVID-19, even if China's
massive failures in the early days of the pandemic have not been forgotten.
Until the middle of January, the coronavirus epidemic wasn't even mentioned in
discussions German diplomats held in Beijing. Once the Chinese leadership
finally admitted that the disease could be transmitted from person to person in
late January, cooperation on measures to combat the pandemic improved, say
diplomats. In early April, Merkel promised the delivery of aid supplies to
China, with President Xi Jinping ensuring in return that Germany would have
access to a state-run Chinese company that produces protective clothing.
The Germans
view Trump's attacks on China for its handling of the pandemic primarily in
light of his reelection campaign. The escalation of tensions between Beijing
and Washington, the German government believes, is coming from the U.S.
president and his administration, not from the Chinese.
Still, the
German chancellor has no illusions about either of the superpowers. A source close
to Merkel says she has explained the situation as follows: There is little one
can do to influence the two superpowers anyway. Germany can merely choose which
one it finds least troubling.
Nevertheless,
the difference in tone she uses in public statements is striking. Whereas she
has repeatedly made it clear how little respect she has for the U.S. president,
Merkel has been much more reserved with criticism of the course charted by the
Chinese. And while she seems to try to avoid Trump, she will spend hours in
talks with Xi during her visits to Beijing.
Profiting
Handsomely
Indeed,
Merkel has focused heavily on China during her tenure, having visited the
country 12 times since taking office, usually heading out to a province
following her stay in Beijing. In 2010, she celebrated her birthday with her
husband Joachim Sauer in Xi'an, southwest of Beijing.
Last
September, Merkel headed to China with a large business delegation at the apex
of the demonstrations in Hong Kong. She urged Beijing to exercise restraint in
dealing with the protesters, but the trip itself sent a message that Germany
wouldn't make its ties with China dependent on Beijing's approach to human
rights.
Merkel has
a significant amount of respect for the unprecedented economic rise China has
experienced during the 15 years she has been in office. China's share of global
trade has doubled during that period, its economy has risen to become the
second largest in the world, gross domestic product has increased by a factor
of 10 and over 200 million people have been pulled out of extreme poverty.
Germany has profited handsomely from China's economic rise.
For the
fourth year in a row, China was Germany's largest trading partner in 2019, with
the bilateral trade volume at 206 billion euros. German companies exported 96
billion euros worth of goods to China, a situation that creates a certain
degree of dependence and one about which politicians in Berlin are concerned.
"It isn't a good idea to turn back the clock on globalization," says
Economics Minister Altmaier, "but the corona crisis has demonstrated that
we must minimize one-sided dependencies and assert or reclaim national
sovereignty in sensitive areas."
Fearful of
Chinese takeovers during the coronavirus crisis, Altmaier's ministry changed
German law to give the Economics Ministry the right to block the purchase of
company shares above a certain level by non-EU investors. Indeed, the
government can step in even if the danger of such a purchase is merely
theoretical and not acute.
"Germany
remains an open investment location, but we have to have a better idea of which
successful and strategically important companies are in the focus of takeover
efforts so that we can react as needed," says Altmaier. That applies, for
example, to the production of vaccines and medical protective equipment, he
says.
Sanctions
on European Companies?
Since the
advent of the corona crisis, German companies have grown increasingly concerned
that they could get trapped between the fronts of the competition between China
and the U.S. And the danger doesn't just come from a China that ruthlessly
pushes through its economic interests. They also see a threat from the other
side of the Atlantic. They are concerned that Trump could impose sanctions on
European companies if they continue to do business with China.
German
companies have grown increasingly concerned that they could get trapped between
the fronts of the competition between China and the U.S.
In the
conflicts with Russia and Iran, after all, the U.S. has already long-since
begun applying its sanctions to foreign companies. Their branches in the U.S.
face significant penalties, with the most prominent example being companies
involved in the construction of the Nord Stream 2 natural gas pipeline.
It could
also become an issue when it comes to choosing a supplier to construct 5G
infrastructure in Germany. The U.S. has launched an offensive against the
Chinese supplier Huawei, but Berlin believes that network security is not
Washington's primary concern. Instead, government officials are of the opinion
that the U.S. is aggressively defending its economic interests to protect its
own producers against the products of Chinese competitors - products that are
continually improving. It is certainly possible that Deutsche Telekom could
face sanctions in the U.S. if it decides to use Huawei products instead of
technology from the U.S.
The German
government is now attempting a tightrope walk: Berlin doesn't want to issue a
blanket refusal to Huawei, but is planning an extensive security evaluation
that could result in the Chinese company being left out.
The summit
in Leipzig also promises to be a high-wire act, if it takes place at all. There
are plenty of conflicts at hand, including the situation in Hong Kong, China's
aggressive stance on Taiwan, the jarring behavior of Chinese diplomats in Paris
and Brussels and, as if all that weren't enough, elections are scheduled to be
held in Hong Kong just a week before the September summit.
"The
challenge will be that of defending our values while not losing China as a
partner," says Niels Annen, the state minister. Brussels is well aware
that the summit could provide China with valuable propaganda ammunition for the
boost it could give President Xi's international reputation. "There are no
substantive issues that the Chinese are interested in," says on EU
diplomat. "Most important are the images."
As a
result, there are some in Brussels who are hoping that Merkel's summit doesn't
take place. "You can, of course, try to hold such a summit without
mentioning the words Uighur or Hong Kong," says Reinhard Bütikofer, a
European parliamentarian with the Green Party. "But who would be able to
look at themselves in the mirror afterward?"
In Berlin,
too, frustration is growing with both Beijing and with German diplomacy. The
business-friendly Free Democrats (FDP) have already demanded that the summit be
cancelled due to Beijing's recent activities in Hong Kong. CDU politician
Röttgen has also now joined the chorus of critique. "Germany and Europe
must address much more explicitly the fact that China is interfering with Hong
Kong's right to self-determination and is thus violating an international
treaty," he says. China's behavior, he says, has undergone a
"dramatic shift."
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