Beijing finds itself much more at ease with Berlin than it does with Brussels. German Chancellor Angela Merkel’s recent visit to China, the second this year, is a confirmation. Seven members of her government and dozens of her captains of industry crowded the delegation, which was received with full honors. China sees an ideal partner in Germany: a competent administration, cutting edge industry, a healthy economy, financially confident of China, and a good international reputation. The European giant represents an anchor of stability, a destination for Chinese exports and a supplier of sophisticated technology. Its government bonds also a safe haven, even with tiny interest rates, from the stormy market.
Those watching did not have to wait long for the outcome of the visit: 18 commercial agreements were signed on the first day, the most notable of which being an order for 50 Airbus aircraft worth a total of 8 billion Euro. The other accords were related to communications, automotive, energy, health, and maritime cooperation. The foresight of those who never subscribed to the “less is more” approach to China has been rewarded. This is just the latest successful partnership between the two countries.
The commercial exchange between China and Germany has nearly doubled over the last five years, last year reaching 150 billion euros. Germany denies fears of an invasion of Chinese products, and in fact it has an export surplus towards China thanks to the quality of its manufacturing. It provides 5% of Chinese imports, the most from Europe, with a market share five times larger than Italy. German investment in China is also growing, reaching 26 billion Euro, while those going the other way are already significant, aimed at acquiring technologically advanced companies. It is therefore unsurprising that the diplomats speak of a “special relationship,” or that German Foreign Minister Westerwelle defined China “one of the formative powers of the twenty-first century,” and that Angel Merkel refrained from raising any complaints about the behavior of Chinese authorities towards European corporations.
China sees Europe as weak and divided. A Beijing-centric state does not name definite partners, and privileges the most authoritative. The Old Continent is weakened by public debt and China gives only vague promises of supportive action. Wen Jiabao, nearing the end of his mandate, reiterated this policy with more worry than hope.
Beijing can only buy European debt provided it has the assurances that at the moment are not being given. It does, however, understand that a healthy Europe is the most powerful draw for its products. The bidirectional exchange with Germany is its most important and profitable. Again in this case Germany is a European exception. The mission to China is a sign of the triumph of friendly pragmatism, an easy shortcut for powerful countries in a time of crisis. It could, however, turn out to be shortsighted, as it lacks the political, and probably ideological, lifespan.
Angela Merkel ideologically weakens Europe when she fails to mention economic nationalism, discrimination against Europe’s corporations in China, human rights violations, or the hope of China taking a stabilizing role on the international stage. This is the position of the European Union, and it should be confirmed by its most powerful leader, not just used to promote an internal election. Reassuring the Chinese leadership on the prospects of the Euro is more important than highlighting Germany’s differences with Europe’s southern economies. It is the same difference between a politician and a statist. China ought to be guided towards Europe, a region whose intricacy it hardly understands, due to egoism and a poor familiarity with complex situations.
China has lost the chance to intervene during the darkest moments of the Euro crisis. Not only has it given up on substantial profits by refusing to buy non-German bonds when interest rates were at their highest, but it has failed to position itself as a global interlocutor. Just when it could have solidified its ascent with interventions that could have garnered admiration and respect, China preferred to hunker down in a careful calculation. If the crisis appears to be long lasting but slowly improving, Beijing will probably regret confusing accounting with economics, nationalism with globalization. As a consequence, even Germany could have strengthened its European role, recognizing that it is presumptuous, and dangerous, to mistake Berlin for Brussels, or a part for the whole.