China finds a great friend in Germany

http://www.nytimes.com/2010/10/22/business/energy-environment/22iht-rare.html?_r=1&src=busln

China finds a great friend in Germany....
By Jian Junbo

SHANGHAI - China and Germany are moving toward a closer and friendlier partnership, a process that seemed highly unlikely just three years ago and which could provide Beijing with an influential ally on the world stage.

In mid-July, German Chancellor Angela Merkel paid a four-day visit to China to boost economic and political ties; this was her fourth trip since taking office in 2005. Notably, German President Horst Koehler paid a state visit to China two months ago.

Merkel's delegation, which included cabinet ministers and business people, secured contracts worth billions of euros for leading German corporations such as Siemens, Daimler Benz, BASF and Volkswagen. The countries also signed a joint communique, their second since they established formal diplomatic relations in 1972.

When Merkel assumed office in November 2005, Beijing feared her hardline policy would seriously challenge the traditionally friendly Sino-German relationship. During her first China visit as head of government in September 2007, she talked openly about the importance of human rights and Chinese leaders did not take kindly to being lectured to.

More upsetting for Beijing was that shortly after returning home form China, Merkel met the Dalai Lama, the exiled Tibetan spiritual leader whom Beijing considers a separatist. Then, a month later, in October 2007, Merkel's ruling coalition issued a report on its Asia strategy in which a new German-China policy was outlined.

It stressed that Germany should balance its foreign policies among big Asian countries, which signaled that Merkel would attach greater importance to Germany's relations with countries such as Japan and India.

The report said that German partnerships could only be maintained when they were based on shared values and ideas. As such, Germany should form closer relations with democratic states, especially Japan, India, South Korea and Australia. Although seeing a rising China as a window of opportunity for Germany, the report considered China as more of a challenge.

In early 2008, when the torch for the Beijing Summer Olympic Games was making its way through Europe, members of the Free Tibet movement - which wants independence for Tibet from China - were very active in Germany trying to sabotage the torch relay. There were reports that they were supported financially and politically by German non-governmental organizations and even politicians.

In Beijing's view, such antagonism toward China in German civil society was at least acquiesced, if not encouraged, by the German government on the pretext that Germany was a democratic and free society. All the same, in February 2008, Merkel, in a telephone conversation with Chinese Premier Wen Jiabao, had promised that her administration would actively adhere to the "one China" policy, that is, not support independence for Tibet.

Then, shortly after the conclusion of the Beijing Olympics, the global financial crisis broke in the United States and quickly spread around the world, with Europe hit hard. In October 2008, Merkel visited China on the sidelines of an Asia-Europe summit in Beijing. Her visit signaled that China-Germany relations had started to improve.

That improvement has continued, with Wen saying Merkel's recent visit had "historical significance". The use of these words is important as they signify that major change(s) are underway. With these words, Chinese leaders expect China-Germany ties to become not only closer but also more stable than ever before, so that they evolve into a truly strategic partnership.

In other words, Chinese leaders hope the partnership will be based not only on economic mutual benefit but also on political trust and strategic dependence, beyond quarrels over ideological differences.

However, judging from the composition of Merkel's delegation, Berlin is still more focused on economic matters. In one sense this is understandable as China is the biggest foreign market for Germany, and at the same time Germany is the biggest economic partner of China in Europe.

Overall, German exports to China amounted to 36.5 billion euros (US$46.2 billion) last year, and imports totaled 55.5 billion euros, according to the German Federal Statistics Office. In the same year, Germany's total exports dropped 18% due to the global economic slump, while its exports to China climbed 7%, according to the German newspaper Frankfurter Allgemeine Zeitung.

Siemens, an electronics and engineering giant that is a bellwether for the global and German economies, said on Thursday that quarterly profits rose 9% to 1.44 billion euros (US$1.38 billion), in part "because of soaring sales in countries like China and India", the New York Times reported.

Volkswagen, the largest carmaker in Europe, said net profit rose more than fivefold to 1.35 billion euros, fueled by a 45% surge in sales to Asia. Volkswagen saw huge gains in China, where unit sales rose 46% to 951,000 vehicles in the first six months of 2010. China now surpasses Germany, where sales fell 16% to 533,000 vehicles, as VW's largest market. A year ago, sales in the two countries were almost even.

The importance of China to Germany is clear, and significantly Merkel refrained from lecturing her Chinese hosts on the importance of human rights, although she did touch on the topic in a speech to students at the Central Party School, the Chinese Communist Party's top training center for senior officials headed by Vice President Xi Jinping.

For Beijing, Merkel not bringing up the topics of human rights, good governance and democracy in meetings with Chinese leaders is a constructive attitude toward building a stable and pragmatic partnership. These topics can be addressed in the annual human-rights dialogue between the two countries.

It is interesting to note that Merkel visited Xi'an, the capital of Shanxi province in northwest China that was the national capital of several dynasties, including the Tang Dynasty (618-907 AD). This city, like Qufu in east Shandong province - the home town of Confucius - is undoubtedly a traditional culture center and in Chinese eyes, Merkel, by going to Xi'an, was showing her respect for Chinese culture. In other words, at least culturally, Berlin is now willing to consider China as an equal partner.

Merkel also had some kind words, "We must learn to understand China, its great culture and huge potential." This indicates that she is open to discussing issues beyond bilateral ties with China, such as climate change, energy and the world financial order.

A study on European Union-China relations by the European Council on Foreign Relations, an influential think-tank, has suggested that the members of the European Union should unite internally and with other powers, especially the US, to force China to yield to the West on issues such as human rights, trade protection, intellectual property rights and so on.

The report serves evidence that some Europeans still look at China with antagonism and hostility. Ideological differences between China and Europe become their cheap weapon to fire against China and geo-economic conflicts are a useful excuse to criticize China.

From this perspective alone, China's relations with the EU and its member states could and should be strengthened to become more stable and constructive. In this regard, Germany could prove an important ally.

Dr Jian Junbo is assistant professor of the Institute of International Studies at Fudan University, Shanghai, China.