On Friday June 5th, the Wall Street Journal reported President Trump’s decision to pull thousands U.S. troops from Germany by September. It put German Chancellor Angela Merkel once again in the spotlight. How would she balance the relationship with U.S. and China when Germany takes over the six-month rotating presidency of the Council of European Union starting July 1st?
Merkel expressed in several occasions that she hoped to strengthen the 27-member bloc’s ties with China. In a recent video speech to the Konrad-Adenauer-Stiftung, a think tank with ties to her Christian Democratic Union, Merkel said: “We Europeans will need to recognize the decisiveness with which China will claim a leading position in the existing structures of the international architecture.”
Historically Germany has maintained close-knit political and economic ties with China since 1972 when those two established diplomatic relationship. In 1982 Volkswagen became one of the first International automobile manufacturer to formally enter China. Over the years, with growth rates of around 40 percent per year, the expansion of the production site in China was steadily promoted with the condition of technology transferred to China. Volkswagen now makes the majority of its cars sold in China locally. China buys more Volkswagen Group cars than all of Western Europe and becomes Volkswagen’s largest single country market.
Volkswagen’s successful story in China in which Chinese government’s incentives and regulations play a big role, set a good example for other German big industrial companies like Daimler and Siemens to follow suit.
Since Merkel became Germany chancellor in 2005, bilateral relationship is getting much closer. China remained Germany’s largest trading partner for a third consecutive year in 2018 and Germany has been China’s largest trading partner in Europe.
Thanks to strong performance in China, Volkswagen survived the Dieselgate scandal which broke in late 2015 despite millions cars were recalled worldwide and $2.8 billion criminal fine was ordered to pay by a US federal judge. Wall Street Journal reported, Chinese consumers purchased a whopping 16.75 million new cars over the first nine months of 2016 – an increase of 15% over the same period in 2015. Apparently Chinese government’s massive car purchase for officials to support Volkswagen was attributed to it.
Germany has been leaning on China as a market for its exports, for cheap supply and for its investment as well. Although German media coverage has been mostly negative on the controversial China’s Belt and Road Initiative that China’s President XI Jinping launched in 2013, with press reports depicting BRI either as a geopolitical threat or as an over-ambitious endeavor doomed for failure, Chinese companies kept pouring money to Germany. Former Chinese conglomerate the HNA Group became Deutsche Bank’s single largest shareholder in 2017 which triggered European Central Bank to investigate whether HNA could wield significant influence over the company as its largest shareholder. During the same year HNA acquired an 82.5% controlling stake in Frankfurt Hahn Airport, a former military airport. However Chinese business tycoon, the pioneer and leading activist of the Whistleblower Movement, Miles Guo revealed there was money laundering involved in the deals which could be used to carry out Chinese Communist Party’s “BGY” 1 plan.
Putting economic interest higher than anything else, Merkel has been hesitant to raise human rights issues with China including Beijing’s crackdown on Hong Kong protests and even talk about China’s disputed claims and actions in South China Sea. Merkel has visited China 12 times in her 15 years of being in the office. No other EU leader enjoys as much respect in China as she does. Why is the “Queen of Europe” bonding so closely with the authoritarian regime? Her communist roots in East Germany might be the answer, the Marxism-Leninism mentality might have been embedded in her psyche.
After her term ends 2021, Merkel will step down and her era will be over. Regardless, she will be remembered as the first East German, the first woman chancellor serving four consecutive terms.
Note: 1 “BGY” is Chinese Communist Party’s operation scheme – to use the threat of exposure, following wiretapping and/or internet
surveillance, bribery or sexual involvement with a “liaison”, in order to blackmail people of interest into working for them.