• + Angela Merkel has failed to denounce China over the internment camps in Xinjiang and the New Security Law in Hong Kong. 
• + Both externally and internally, her allies urge the leader to adopt a harsher stance against China. 
• + Trade ties and economic motivation lay behind her softness.

Why is Merkel’s heat level cold? 

Answer: Her soft approach to China is alone and outdated. 

Angela Merkel has been highly criticized for her soft stance against China. She has avoided antagonizing the country by refraining from commenting on the harsh new security law imposed in Hong Kong, on the mass internment of Muslims in Xinjiang, and refusing to bar Huawei’s 5G tech from the German economy despite the enormous pressure from the UK and the US. Instead, in a recent communication, the Chancellor highlighted the need to “seek dialogue” with the People’s Republic based on “mutual respect” and a “relationship of trust”. She stated that it is in Europe’s interest to continue to cooperate with China in terms of climate change solutions and the development of Africa.

However, her attitude towards Xi’s government is chilly heading to freezing as she seems to be alone. Throughout the German political spectrum, not to mention within the EU and among her greatest allies, condemnation trumps cooperation when it comes to China.  Her critics point out she is still holding on to the idea of convergence of values as economic integration continues. However, they argue this idea of China incorporating Western values is out of date and belongs to a pre-Xi world. Change is called for from many different fronts. 

Who is changing Merkel’s temperature? 

Answer: Her allies, internally and externally.

Externally, all of Merkel’s allies seem to be on a different page. From Trump and the Sino-American trade war to the recent UK decision to ban 5G from the country’s network, all of Germany´s pals agree China must be reckoned with more harshly. The EU, headed by Germany since July 1rst, is still considering its stance against the Asian Giant. 

As seen in a previous RAIA Article, tensions are rising between von der Leyen, President of the Commission, and Xi after investigations revealed the Chinese were responsible for massive waves of misinformation on COVID 19. While a diplomatic tone was maintained, this was the first time the Commission actively called out Xi. Moreover, the EU, for the first time, slapped tariffs on Chinese owned companies outside China as protection against Chinese expansionism within the Single Market. While sour at the moment, their trade relationship is not going anywhere. 

Economically, China matters (a lot) to the EU and vice-versa. China is the EU’s second-largest trading partner after the US. EU-China trade makes up for 10% of the total trade of goods and 19% of exports in services. Additionally, and regarding the new security law in Hong Kong, von der Leyen has been highly critical of a political move by China, along with most leaders within the Union, except, of course, Germany. 

All this tension was witnessed in the 22nd bilateral EU-China Summit attended by Xi and von der Leyen on June 22nd via video. While the main theme of further economic cooperation was discussed, the EU reiterated the need for economic reciprocity and rules-based trade. The overall ambiance was not one of friendship and the summit ended without a joint declaration. Still, Xi believes the EU should look at China as an opportunity, not a threat. Merkel is not the only one to agree. Both Italy and Greece have signed into the Belt and Road Initiative by Beijing. Still larger powers, including France, the UK, and the US, strongly disagree with this position. 

Even within her party, the Christian Democratic Union, leaders have opposed her refusal to blame China directly. Norbert Röttgen, head of the Bundestag’s foreign-affairs committee, called her attitude of “self-censorship” behind the times. German companies agree. In 2019, many business organizations, including the German Chamber of Commerce, saw the fate of rule-based trade with China fading as nearly a quarter of German firms operating in China were planning to remove their business from the People’s Republic. From the perspective of German industries, China has shifted from a loyal customer of their exports to a challenger. This fear is not baseless. China is now the second global exporter of machinery following Germany close behind. 

What is driving Merkel? 

Factors driviring Merkel’s decision.

Answer: What drives the world? Money and political convictions. 

Merkel has always kept the economic ties between China and Germany in mind when handling the relations with Xi and his party. Ever since she came into power in 2005, Merkel has worked to deepen the trade relationship between the two nations. German exports to China have quintupled reaching $110 billion. Her efforts to deepen economic ties with Beijing have succeeded. Since 2016, China replaced the US as the largest trading partner and many argue Germany is more exposed to China than other European countries. 

While there are many economic reasons behind Merkel’s mellowness towards Xi, the production of high-value-added products, such as cars and machinery, is key. The export of these products accounts for 70% of all exports to China. These companies have been quick to tap into the enormous potential of the Chinese market and have born great results from it. For example, Volkswagen’s sales in this market account for 40% of the firm’s sales. Merkel is rightfully protecting her own as the threat against carmakers was materialized by Beijing’s ambassador in Berlin. 

However, it is not all about money. Merkel, unlike her main allies in the US and UK, upholds a different political conviction on how to deal with the rise of this Asian Giant. She believes efforts to contain China carry more risks than rewards. Cooperation with China, as seen by her multiple trips to the country over the year, is key to the leader. She believes that China can help shape rules on tech and AI, that a divided world in terms of technological hemispheres should be avoided, and that multilateralism should not be forgone for bipolarity. However, considering the actions of the other tech superpower, the US, this cleavage seems unavoidable. 

What does this mean for you? 

Answer: Multilateralism is ever-fading. 

Merkel’s multilateralism, seen as “outdated” by some, perfectly portrays the shifts international relations have taken in the last few years. From liberalized economies based on deep integration and increased trade within a globalized system, the largest powers around the world are shifting towards protectionism, trade restrictions, and confrontational politics. Merkel’s soft-power, trade-based approach towards China now stands alone among the major powers.

However, the People’s Republic has also changed. Under Xi’s leadership, the country has grown and continued to assert more and more power, and with that power carried out more abuses. From the growing aggressiveness in the South China Sea, to the lockdown on Hong Kong’s freedoms, China seems unstoppable. Going harder on China might be the only option for Germany and with it the EU. Merkel’s hopes for cooperation are fading alongside multilateralism.