65-year-old German Chancellor Olaf Scholz made his debut on TikTok.
Schulz's unexpected appearance Controversial application It's not a coincidence. The Chancellor's message a few days before his visit to China (where TikTok originated) was clear: the friend is coming. finally The advisor needs Beijing.
The next elections in Germany will be held in just over a year. The head of government of the former European economic powerhouse is running out of time. He must perform a miracle and improve the terrible reputation he has in German society. Schultz's three-day visit to the Middle KingdomHis foreign trip, which begins on Saturday, will be his longest and most important foreign trip since he took office in late 2021.
For the chancellor, who is struggling with record low support ratings and infighting within the coalition, the visit is more than just an opportunity to assert his position in global politics. Most importantly, Olaf Scholz will want to show voters that he will do everything in his power to make Germany stronger.
Business matters
China seems like a place Schultz should avoid. This is evident in the fact that the United States – Germany's major ally – is putting pressure on Berlin to avoid the risks associated with relations with Beijing. Not to mention China's recent exploits in terms of… human rights.
Under leader Xi Jinping, China has taken an authoritarian turn, suppressing the democracy movement in Hong Kong and locking more than a million Uyghurs in “re-education camps” (which worryingly resemble… Concentration camps).
One might expect that history had taught Germans sensitivity to the status of an ethnic minority forced to live behind barbed wire and guarded by armed guards on towers. Nothing could be further from the truth.
Even as German leaders remind the world of their commitment to the highest ethical standards, Berlin has proven time and again that it is not willing to sacrifice its prosperity for human rights, American security concerns, or even the European Union's fear of trade and industry.
Schulz does not draw any conclusions
Let's look at relations with Russia, for example. Only when Russian tanks rolled into Kiev in early 2022 did Germany, which for years had ignored Allied warnings about its dependence on Moscow, change course and begin to wean itself from Russian energy.
But this does not mean that Schulz has reached any conclusions. His concerns about dependence on other countries appear to have evaporated amid the storm clouds hanging over the German economy.
Siemens factory in Shanghai
Schultz's maneuver may not succeed in China.
highway to hell
From the perspective of German exporters, the road to China has been paved with gold for decades. Excuse me Increase profits and maintain Germany's position as one of the largest economies in the world.
Recently though This road looks like a highway to hell. All of this is due to Beijing's protectionism and harsh industrial policy.
Two-thirds of German companies that participated in a survey conducted by the German Chamber of Commerce complained of “unfair competition” in China.
Meanwhile, the European Union is increasingly frustrated with Beijing's generous subsidies for important industries Wind turbine manufacturers For automobile companies. Huge imports of cheap Chinese electric cars to Europe are putting pressure on local manufacturers. So much so that Brussels is considering imposing tariffs in the summer.
The industry is under pressure
German automobile industry It was also under pressure from cheap imports. But companies like Mercedes and BMW are reluctant to support punishing China for fear of hurting their businesses if Beijing retaliates. Such a scenario is possible.
In other words: there is no going back. When German industry first moved to China in the 1980s, politicians and executives thought they were investing in the future. That with prosperity, China would liberalize and become more Western and even democratic.
Chinese Premier Zhao Ziyang and Chancellor Helmut Kohl in Beijing, July 14, 1987.
It was a nice theory. The practice, as the Uyghurs attest, is very different.
Germany needs China
China has spent decades learning from the West and developing its own technology to the point that it is no longer dependent on countries like Germany. Unfortunately, it doesn't work both ways – Berlin still needs Beijing.
This is the case for German companies such as Siemens and Volkswagen, which began investing in the Chinese market 40 years ago. One of the pillars of global operations. China alone is responsible for about 50 percent. Global sales of Volkswagen cars.
Despite Volkswagen's troubled history – The company was founded under Nazi rule and relied on slave labor during World War II – and it still has a factory in Xinjiang. Where Uyghurs are detained. While the company has been criticized in Germany for this reason, a withdrawal would risk angering Chinese leaders.
The most dependent on China are major German car companies and chemical producers such as BASF. Many sub-suppliers also chose the Middle Kingdom.
Trade with China brings us prosperity and is practical in the short term Irreplaceable – says Moritz Schularek, President of the Kiel Institute for the World Economy.
“Paralyzed economy”
After a weak 2023, economists and the International Monetary Fund predict Further recession in the German economy. Exports have fallen by more than 2% this year, with no signs of improvement in sight. While unemployment remains low, that could change quickly if the economy does not rebound.
Germany faces Many challenges are associated with economic growth – From a chronic shortage of skilled workers to excessive regulation. Some economists believe the most paralyzing factor is negative sentiment among businesses and consumers.
“It is as if the German economy has been paralyzed,” says Timo Wellmerhauser, an economist at the Ifo Institute in Munich, one of the most important economic research centers in Germany.
In this context, Schulz's journey appears An act of despair. Even if China opens its doors to more foreign competition Stop the practice of price dumping in EuropeChina's economy is not the growth force of the past. The real estate crisis and excess production capacity in key sectors also put the Middle Kingdom on the brink of abyss.
A break with China?
Even more worrying is that China no longer needs the machinery and other high-tech capital goods that have fueled German export growth in recent decades. The reason is not only weak demand. CChinese companies have largely caught up with their German competitorsWhich makes your country less dependent on imports.
These trends lead some politicians – especially the Green Party, which is critical of Beijing – to argue that Germany should strive for independence from the Chinese economy. According to a recent study conducted by the Kiel Institute, separation from China would reduce the German economy by about 5%. This is similar to the economic downturn in Germany after the 2008 financial crisis or the Covid-19 pandemic. In other words, it will be painful, but not fatal.
“Our country is resilient enough to deal with such an extreme scenario,” says Schularek.
Easy to say. Schulz cannot afford further erosion in trade relations between Germany and China at a time when his country's economy is already suffering.
There is no alternative
The problem with Schultz is that he has no one to turn to.
German industry is strongly linked to the United States, which remains by far the country's largest export market. In 2023 alone, German exports to the United States amounted to EUR 158 billion (about PLN 630 billion), and to China – EUR 97 billion (about PLN 390 billion). On paper, Beijing – Germany's largest trading partner after adding exports and imports – appears to be a market with greater growth potential.
Given the dire economic situation in Germany, Schulz must prove that he is doing something. Given the success German companies have had in China over the years, there is no better place where he can prove to voters that he means business.
Tensions between Washington and Beijing over Taiwan and global security have put Germany in a difficult position. The United States and China together account for nearly 20 percent. German trade, which means the country cannot afford to lose any of its partners.
In search of balance
Germany's dependence on the United States for security means that it may have no choice but to yield to American pressure to distance itself from China. However, Schulz, like Angela Merkel, has so far managed to find a balance Between two economic powers.
The success is partly due to Berlin is indescribable. Germany was not convinced by American pressure to prevent the Chinese company Huawei from providing the equipment necessary for modern mobile phone networks. However, they promised that they would look into the matter carefully. Five years later, they're still watching, and Huawei is still as active as ever.
German industry has not reduced its involvement in China. On the contrary: you could say he has come all the way. In 2023, German direct investments in this country reached a record amount of almost 12 billion euros (about PLN 15 billion). According to estimates by the famous IW Köln Economic Institute, between 2021 and 2023, Germany will invest more in China than in the previous five years.
Schultz ignores American suspicions
No one understands Germany's dependence on China better than Xi Jinping. After being healthy in 2022 Appointing him as leader of the nation for lifeSchulz was the first foreign politician to visit.
The delegation accompanying the advisor tried to present the trip as a peace mission. Germany claimed that the chancellor convinced Xi Jinping to prevent Vladimir Putin from using nuclear weapons in Ukraine.
Until then, Schulz's main goal was work. ignorance Washington's doubtsHe took with him a delegation of about ten representatives of German businessmen to Beijing.
Tight visiting schedule
This time it's Schulz's visit Even more ambitious. He plans to visit three cities – Shanghai, Beijing and Chongqing, a metropolis with a population of 30 millionWhere hundreds of German companies operate. The highlight of Schultz's trip will be meeting with Xi Jinping on Tuesday.
The German economy may be in a weak state, but China still highly values its good relations with Berlin. Both are due to Germany's position in the European Union and its close relations with the United States.
Donald Trump's return to the White House next year will be a golden opportunity for the Chinese leader to woo Berlin with the promise of closer economic ties.
The question is whether Schulz wants to dance to Xi Jinping's music.
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