Germany's toughest minister visited China for the first time, visiting three cities to solve the problems of China and Europe

Aoki in Germany

2024-06-19 06:27Published in Germany, Global Times correspondent in Germany, creator in the international field

German Vice Chancellor and Economy Minister Habeck set off on Wednesday for a five-day "East Asia tour." On Friday and Saturday, he will visit three cities in China. This is his first visit to the world's second-largest economy. The central topics of the trip were economic and trade relations, climate protection and energy policy. The German Broadcasting Corporation pointed out on the 18th that Habeck's visit to China will hold talks with the Chinese side, propose a solution to the EU's tax hike on Chinese cars, and obtain more access to the Chinese market for German companies.

Habeck on a government plane

Visit Beijing, Shanghai and Hangzhou

According to the German Ministry of Economic Affairs, Habeck's trip to China and Europe will visit Beijing, the capital of China, and Shanghai, China's economic metropolis, as well as Hangzhou, where Alibaba and other large enterprises are located. Prior to his visit to China, Habeck will visit South Korea and is expected to meet with South Korean Prime Minister Han Duck-so and Trade Minister Ahn De-geun in Seoul, the South Korean capital. Trade between Germany and South Korea has reached 34 billion euros. South Korea has also become Germany's second most important export market in Asia.

Handelsblatt said that none of the government planes that Habeck flew with to China were particularly representative of large international companies, but they were also representative of the German economy. They include representatives from companies such as Regina Hagen-Eck, chair of the advisory board of automotive supplier Voss, Kirsten Schooder Steinmüller, head of metalworking company Schoder, and Henning Rattle, head of supply chain at solar start-up Enpal.

In addition, representatives of the Federation of German Industries (BDI) and some members of the German Bundestag will also be joining Habeck. Allegedly, any expenses of these business executives. For example, you have to pay for hotel fees, flight fees, or cancellation fees.

This is reported by the German Broadcasting Corporation

Talks with the Chinese side to resolve the EU tax hike

According to the German news agency dpa, Habeck's visit to China faces some thorny issues. The European Commission last week threatened to impose punitive tariffs on Chinese electric vehicles over alleged unfair subsidies. As Europe's largest economy, Germany's voice is particularly important, with major German automakers strongly opposing the EU's tariffs and urging dialogue, while also hoping for a compromise from China.

Last week, Habeck made his position clear: he does not believe in protectionism. Habeck fears a trade war and a tariff race. "If we get involved, the baby will be dumped along with the bathwater," he warned. "Tariffs" are always only a last resort and often the worst option. "Therefore, the discussion is crucial." Now is the opportunity to stop this menacing vicious cycle. ”

"Habeck should act here as a mediator between the EU and China to resolve the trade dispute as soon as possible in order to safeguard the interests of German SMEs." Patrick Schinofsky of the German Association for Small and Medium Enterprises (DMB) said: "The aim of negotiations with China should be to address the root causes of the punitive tariffs. The parties hoped that an "appropriate solution" would be found in Habeck's talks with the Chinese side. Last week, German Chancellor Olaf Scholz also said on the sidelines of the G7 summit that he was firmly committed to working to prevent the European Union from imposing punitive tariffs on Chinese cars.

Chinese cars arriving at German ports

German companies complain that "Made in China" is too competitive

Another problem is that as Chinese companies become more competitive, Germany's proud pillar industries such as mechanical engineering and automobile manufacturing are gradually being overtaken by China.

According to a report released by the German Chamber of Commerce in China on the 17th, a survey of 186 German companies in China showed that 61% of companies believe that price pressure is the main challenge faced by German companies in China. 38% of companies expect China's economy to develop better in the next six months than in the first half of the year. Nearly half of the German companies surveyed do not expect the economic situation to change much. Over the next two years, more than half of the German companies surveyed want to increase their investment in China. These investments are mainly aimed at improving competitiveness.

"China is once again a very important sales and supply market for German companies," a spokesman for the German economy ministry told dpa. Last year, bilateral trade amounted to 254 billion euros, accounting for one-twelfth of Germany's total trade in goods.

Made in Germany is increasingly being contested by Made in China

Interested in running for chancellor of Germany

During this visit to China, Habeck could not avoid international affairs such as the Russia-Ukraine conflict. Just over two months ago, he personally went there, and not far from the front line, several air strikes forced him into bunkers. Climate cooperation is also important with China, the world's largest exporter of renewable energy technologies. Solar photovoltaics, in particular, already account for about 85% of global production.

Habeck has always been regarded by the German media as the "toughest German minister on China". He called on German companies to "de-risk", reduce their dependence on China, and remove guarantees for German companies investing in China. At the same time, he also restricts Chinese companies from acquiring German companies and investing in Germany.

There are many science and technology enterprises in Hangzhou

However, with the German economy in trouble and the Green Party losing badly in the European elections, Handelsblatt believes that it is entirely conceivable that Habeck's visit to China will adopt a more moderate tone. He has shown a preference for financial compromise.

Habeck, a philosopher, is also said to be a candidate for chancellor of the Greens in the 2025 German chancellor's election. His opponent in the party is former trampoline athlete and German Foreign Minister Baerbock. However, to become German chancellor, he should first boost the German economy, and this will require the help of the Chinese market.

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