Remember, Berlin, Brussels is closer than Beijing

Whether or not Angela Merkel’s recent visit to China can be judged a success or a failure depends on the expectations. Was she in Beijing as the unofficial leader of a headless Europe, or as the Chancellor of Germany? From a pan-European standpoint, the visit was disappointing. Merkel came away from the table without securing any major concessions from Beijing. Her calls for redress of the human rights situation were received with indifference, as if by now China considers them a routine affair, a recurring critique of a domestic issue that hardly merits a response. Pressure to join the embargo against Iran became, in Merkel’s words, a request not to increase oil purchases from Tehran. The veto of UN sanctions on Syria is just the latest example of Beijing’s reluctance to follow other countries’ recommendations.
A simple statement was the best Merkel could do for the European community: China will be “more deeply involved” in helping to alleviate the European debt problem through the existing Financial Stability Board and the next European Financial Stability Facility.
Only if these vague words bear fruit will the visit have been a success, but to deliver on this promise Beijing is asking for something Germany is not able to concede on her own. To guarantee assistance, Europe would have to recognize China as a “market economy,” a move that would make ineffective any measures to regulate Chinese exports to Europe, and would lift the embargo on sales of military equipment to China put in place after the 1989 Tian An Men incidents. Without these concessions, China is reluctant to help Europe in a meaningful way. Investments are selected carefully and made only when Chinese interests are guaranteed, no friendship involved. Germany benefits particularly by being today’s sure thing. Berlin’s Bunds are protected by a Triple A rating and German companies are desirable investments, since they represent the best technology available on the Old Continent. Beijing is eager to improve its manufacturing capacity and Berlin can supply what it needs. Chinese investments flow to Germany and German products land in China. Last year German exports to China grew 22%, creating wealth and employment in Germany. Strategic sectors like chemicals, mechanics, automotive, and electronics benefitted the most. The rest of Europe hobbles along while Germany sails ahead, at least with China. Angela Merkel seems happy, but her attitude is shortsighted; Germany’ destiny is linked closer to Europe’s than its Chancellor believes.

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