Germans in the lead, Europeans want to review their economic relationship with China

Audio 03:53

Chinese President Xi Jinping speaks during a session of the International Economic Forum in St. Petersburg (SPIEF), Russia on June 7, 2019. (Illustration) REUTERS / Maxim Shemetov

By: Dominique Baillard Follow

8 min

Chinese leader Xi Jinping and his European counterparts meet at midday for a virtual mini-summit mainly devoted to trade issues.

A modest format, compared to the extraordinary summit initially planned in Leipzig.

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It is not only because of the pandemic that ambitions have been reduced.

Today, Europeans are in full doubt about their relationship with this difficult partner.

In Leipzig was finally to be signed the investment treaty that European companies are eagerly awaiting to facilitate their presence in the Middle Kingdom - it has been under discussion for seven years.

Europeans are wondering: what is the point of a treaty when Beijing continues to tighten access to its market?

This is the finding of the European Chamber of Commerce in China.

In its annual report published last week, it deplores that only sectors where Chinese companies are already very successful and therefore predominant, such as the automobile or banking, are open to foreign companies.

The relationship with China was a priority for the German presidency of the European Union, but Angela Merkel, too, is revising her agenda, under the pressure of increasingly harsh criticism from across the Rhine. opposition.

The most China-oriented German companies started the debate.

The Federation of German Industries (BDI) sounded the alarm in a report released last year.

Relaying especially the anxieties of the

Mid-size companies, which prospered by exporting their machine tools to China, now fear being copied, dubbed and therefore perhaps soon abandoned by these customers in a hurry to break free from their dependence.

Large German companies continue to make record investments in China.

VolksWagen invests 2 billion euros in the electric car.

BASF 10 billion to build a petrochemical complex.

But they too are starting to publicly express reservations against this partner, because of the new legal situation in Hong Kong, because of the oppression of the Uyghurs in Xinjiang, where many of them have factories.

And German Foreign Minister Heiko Maas gladly recalls that 70% of Germany's foreign trade is done with Europe, with China it is only 7%.

Does Germany plan to do without the Chinese market?

This is not yet the option chosen by the Chancellor, nor by her Minister of the Economy Peter Altmaier.

So far, the priority given to economic interests in relations with Beijing has worked rather well in Berlin.

Since Angela Merkel came to power fifteen years ago, German exports to China have quintupled.

If they represent in relative value only 7% of German foreign trade, it is nevertheless more than half of European exports to China, ie an amount of 100 billion euros.

After the financial crisis of 2008, Chinese purchases boosted the German economy.

History repeats itself in the age of Covid-19.

German exports to China rebounded in June, then in July, while exports to the United States remained subdued.

Germany needs China more than ever to regain its energy.

►In short

It was ultimately the Californian company Oracle that was selected for a partnership with the TikTok application in the United States.

Microsoft has been dismissed by the Chinese parent company, the operation, a partnership rather than a takeover, will be detailed in the coming hours.

It must now be approved by the White House.

Donald Trump accuses the platform of espionage for the benefit of Beijing, hence his desire to eliminate him from American soil.

European auto industry urges London and Brussels to find free trade deal

Without a post-Brexit deal, the sector could endure losses of more than 100 billion euros over the next five years, warn manufacturers.

An additional threat for a sector already affected by the Covid-19 pandemic.

This call was launched by some twenty organizations while the negotiations are deadlocked.

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