Germany’s increasing industrial ties to China a subject of concern for many
Liang Wengen, China’s third richest man launched a new $140 million factory amid considerable fanfare. Liang’s firm, Sany is building the new factory in the town of Bedburg near the Rhine River just west of Cologne, in Germany’s industrial heartland. While public officials celebrated the move, the cooperation with Germany also holds warning signs for the industrial giant, and by extension the United States, as China gains economic influence and global know-how.
<Chinese Prime Minister Wen Jiabao and German Chancellor Angela Merkel leave after a joint press conference in Berlin on June 28.
Adding to the two nations’ growing industrial ties, Premier Wen Jiabao landed in Berlin and was greeted by German Chancellor Angela Merkel. Wen brought with him 13 ministers who held a joint cabinet meeting with Merkel’s government – a gesture of closeness Germany has never made to a country outside Europe, except Israel.
Both China and Germany have signed 14 new agreements and China inked $15 billion in new business deals, including the purchase of 62 new Airbus A320 passenger jets.
While this comes as positive economic news for a struggling world economy, some observers fear the emerging Asian giant is poised for a European invasion. Germany’s economic boom is in large part thanks to China, which is now its third largest trading partner after France and the United States.
Nearly one in four Volkswagen cars is sold in China. In addition, China can’t get enough of Germany’s precision machine tools to outfit its production plants.
Germany is extremely grateful for China. But as the new Sany plant in the Rhineland shows, China is also ambitiously getting involved in Germany and Europe – and not just as a trading partner.
“China is taking over Europe,” the European Council on Foreign Relations wrote this week in a preview of a major paper on Chinese-European relations.
The biggest concern was the imbalance in the growing relationship. If Spain or Poland wants to build a highway, Chinese firms can bid for the contract – which they do, often successfully. But European firms, with limited exceptions, can’t do the same in China because its government procurement rules favor Chinese firms.
If Europe were more united right now, it could present a common front against such one-sidedness, but instead individual countries are striking deals with China when it suits them.
“This isn’t China-bashing. You take economic opportunities where you can,” senior policy fellow Jonas Parello-Plesner says. “It’s about Europe’s strategy on China, which was embryonic before and is now much more difficult because countries don’t want to wait for” the European Union to coordinate a united front.
“As Europeans compete with each other for Chinese business, they diminish their leverage and thus reduce their chances of collectively striking a better deal with China.”catholic.org