The German federal election is over, the final results are in – but everything else remains open. Who will become the new chancellor? With which coalition? Christiane Kühl takes the interim phase as an opportunity to look back at 16 years of Angela Merkel’s China policy. Her analysis covers a certain like-minded thinking, the early interest in an upcoming superpower, but also the wishes of the German economy.
Angela Merkel was also a topic of discussion in Beijing on Monday. She has always attributed great value to the advancement of Chinese-German relations, the Chinese foreign ministry’s press conference said. “China appreciates this greatly,” said Foreign Ministry spokeswoman Hua Chunying, adding hope and expectation that the new German government would continue this balanced China policy.
Meanwhile, Universal Studios, located on the outskirts of Beijing, has opened its world’s largest amusement park. From Harry Potter to the Minions to the Transformers, here, America’s soft power can be marveled at in its purest form. Within a minute, all tickets were sold out. Obviously, Beijing doesn’t mind Western influence as long as China makes good money from it, since the park is only one side of the medal. In his analysis, Frank Sieren shows how America’s film studios now have to dance to Beijing’s tune should they wish access to the huge market at all.
I hope our latest issue provides you with many new insights!
In the summer of 2005, political China began to take an interest in the German chancellor candidate. At the time, Angela Merkel was an unknown quantity in Beijing. She had been to China once in 1997 as minister of the environment under then-Chancellor Helmut Kohl but had left no lasting impression. So the question in Beijing was: What would the CDU do differently from SPD Chancellor Gerhard Schroeder? The latter was considered pro-business and pro-China; among other things, he had advocated lifting the EU arms embargo imposed after the 1989 Tiananmen massacre. Merkel, on the other hand, saw no indications for corresponding conditions in the Bundestag in April 2005.
The arms embargo remains in place even today. In all other respects, Angela Merkel did not meet Beijing’s fears of a huge shift. It is true that behind the scenes she promoted human rights and civil society in China somewhat more than Schroeder, who had largely passed these issues to his foreign minister Joschka Fischer. But Merkel, too, always had the interests of the German economy in mind. Like Schroeder, she traveled to China every year with many company representatives among her delegation. And she, too, paid respect to China for its rapid growth.
Angela Merkel – known in China as 默克尔 Mo Ke Er – also held a great curiosity in the country and its radically different way of handling things. That’s why she always traveled further afield to China’s provinces, such as Jiangsu, Hubei, Anhui, and Guangdong, during her state visits to Beijing. Merkel also showed some understanding of the administrative difficulties of governing such a large and diverse country. During background talks, she sometimes discussed with journalists how much democracy was possible in China. And shared astute observations that could not be quoted.
In her 16 years as chancellor, Merkel accompanied China’s tremendous rise – and the growing importance of China for the German economy. German exports to China have more than quadrupled since she took office, to around €96 billion at last count. China has been Germany’s biggest trading partner for the past five years, with a trading volume of almost €213 billion. In addition, German companies invest billions in the People’s Republic.
Today, China is striving to be a global power, seeking to help shape geopolitics and have a say in global technology standards. Without China, effective climate protection will not be possible. “The German chancellor has had China’s growing strength in mind from the very beginning,” her former adviser and later UN ambassador Christoph Heusgen recently told German magazine, Der Spiegel. “She was aware early on: this is a global power in the making.” This was the reason for her frequent travels to China and why she launched the bilateral government consultations in 2010 – a format reserved for close partners that brings all ministers from both nations together at one table. “This intense attention to China was farsighted and valid,” Heusgen said.
Many current topics already emerged during Merkel’s early years: The EU, for example, was already wary of China as a competitor even in the years following Merkel’s first election victory in 2005. Companies feared a closing off of the Chinese market and a deterioration of the investment climate, according to the EU Chamber of Commerce’s EUCCC position paper published in 2007 – just like in the chamber’s new paper published last week (China.Table reported). And just like now, there have been complaints about increasing censorship – as Beijing then began to take stronger action against the freedom of the growing Internet.
In 2007, Merkel met with the Dalai Lama, the spiritual leader of the Tibetans, at the Federal Chancellery. That caused a serious, but not lasting, displeasure in Beijing. During the euro crisis resulting from the global financial crisis of those years, China bought substantial amounts of bonds issued by euro debtor nations to stabilize the situation. Wen Jiabao, then prime minister, repeatedly pledged his support for the euro. Something, according to observers, Merkel was grateful for.
At that time, the German chancellor became China’s primary contact in Europe. “This phase, from about 2008 to 2014, left Merkel with the discernible impression that there was a like-minded thinking that transcended ideological boundaries,” writes Andreas Rinke in the journal Internationale Politik (IP) of the German Council on Foreign Relations (DGAP). “Moreover, their Chinese interlocutors shared their interest in the multilateral world order as a counter-model to the sole dominance of the US and its dollar.“
Xi Jinping’s inauguration as the leader of the CCP and President of China in 2013 marked a turning point. From then on, China acted more confident – and it became apparent that the hope expressed in the formula “change through trade” for a political opening of the system as a result of growing prosperity was not met. On the contrary, Xi himself abolished the term limits for his presidency, expanded censorship, jailed human rights lawyers, and ruled with an increasingly iron fist in Xinjiang and, most recently, in Hong Kong.
Merkel criticized all this but pushed ahead with a close cooperation with China. During Xi’s inaugural visit to Berlin in March 2014, both sides agreed on a strategic partnership – which explicitly covered foreign and security policy. At the time, there were already 60 different dialogue and cooperation formats. At the press conference, Merkel said, “Today we talked about the fact that political trust is also furthered by sharing common ground, by breaking new ground, but also being able to exchange different opinions and talk very intensively about all matters.” It’s a mantra to which she has remained true to this day. In 2014 a financial dialogue and closer cooperation within the UN and the G20 was decided on. “Merkel wanted to gradually move the economic giant toward greater involvement in international organizations and thereby rein it in at the same time,” Rinke writes.
Then came 2016, a year of shocks. In May, the Chinese Midea group took over German robotics manufacturer Kuka: for the first time, a real flagship company fell to a Chinese company, as no domestic buyer had been found. The election of Donald Trump in November 2016 also changed the global macro-weather. Merkel now navigated Germany’s relations with China in an environment increasingly dominated by global crisis management.
During this period, Germany raised the hurdles for foreign companies trying to enter strategic sectors – especially with China in mind. From 2017 onwards, Merkel began to rely more on Europe, as she lost confidence in the US in the face of Donald Trump’s hostile behavior.
And so Merkel did not follow Trump’s China policy. When he directed the ban beam at Chinese telecommunications supplier Huawei, she refrained. In the dispute over whether Huawei should be allowed to participate in the construction of the German 5G network, Merkel pushed for strict security standards instead of a Huawei ban – also out of concern for disadvantages for German companies in China. Corresponding rules were adopted by the federal government in 2020; so far, however, network operators have only contracted European firms. By contrast, the UK, France, and Sweden, as well as the US, have formally excluded Huawei from 5G deployment.
It is also due to such decisions, Europe has recently been repeatedly accusing Merkel of a unilateral China policy. Germany is too economically dependent on China, it was said. That’s why Berlin doesn’t dare to take a tougher line in response to Xi’s authoritarian tendencies and human rights violations in Xinjiang and Hong Kong. During her EU presidency, Merkel pushed ahead with the signing of the CAI investment agreement, which was signed in December 2020 – and is now shelved due to Chinese sanctions against European politicians and think tanks. The last government consultations with China were held in April – albeit virtually because of the pandemic.
Merkel wanted to ensure continuity in the difficult relationship with the new superpower even after the end of her chancellorship. And so she appointed her chief foreign policy adviser and close confidant Jan Hecker as the new ambassador in Beijing. But Hecker unexpectedly passed away in August at just 54, mere days after taking office (China Table reported). So now, after Hecker’s tragic death, Merkel’s successor is expected to appoint the next ambassador. Foreign nations expect Germany’s new chancellor – be it Olaf Scholz or Armin Laschet – to adopt a tougher China policy.
In the midst of diplomatically troubled times, a symbol of American culture has taken up residence on the outskirts of the Chinese capital. Universal Studios’ world’s largest amusement park in Beijing opened its gates to the public last week. Tickets were gone within the minute. The hotel rooms, which cost up to $3,000, were also booked out quickly.
Yet the park is dominated by Western worlds: Harry Potter, Minion Land, Jurassic World, and Transformers. So America’s soft power still seems to pull despite the emphasis on the independence of Chinese culture. The only thing in the park that conveys at least some Chinese culture, albeit interpreted in a US-American way, is Kung-Fu Panda – and it only had the fewest visitors in the first few days.
Qin Gang, China’s ambassador to Washington and one of the first visitors to the park, even declared a ride on the Harry Potter roller coaster a metaphor for US-China relations: “After all tumbling and shakes, the roller coaster came to a soft landing in the end,” he wrote on Twitter on Tuesday.
According to China’s state media, the four-square-kilometer park is expected to attract more than ten million guests per year and generate annual sales of the equivalent of €1.3 billion. The “Universal Beijing Resort” in the Tongzhou district is located around 30 kilometers from the city center of Beijing. The complex includes two large hotels, 80 restaurants, 24 stage shows, and 37 Hollywood attractions.
Universal Beijing Resort is owned by Beijing International Resort, a joint venture between Beijing Shouhuan Cultural Tourism Investment Co. Ltd. and Universal Parks & Resorts, a business unit of Comcast NBCUniversal. The Chinese own 70 percent of the project, while NBCUniversal holds the remaining 30 percent. The equivalent of €6.5 billion was invested in the park, according to media reports. It is Universal Studios’ fifth amusement park worldwide, following its counterparts in Hollywood, Orlando, Singapore, and Osaka.
The opening of the park, which has been under construction since 2015, was postponed for several months due to the Covid pandemic. Visitors still need to wear masks, maintain distance, and register themselves with a health app. The temperature is also taken at the entrance. Admission for an adult is currently €41.50. A new subway stop has even been built primarily for the trip to the park.
Song Yu, head of Beijing Tourism Group, one of the park’s major shareholders, said the Universal Beijing Resort “showcases Sino-American cooperation.” Indeed, the opening happens at a time when political relations between China and the US remain difficult and efforts by American companies to expand their business in China remain challenging.
Harry Potter is the big hit, even if you have to wait in line for 90 minutes to get in. And although it’s not the most spectacular attraction, it should be noted that many visitors, adults, and children, even arrived in matching wizard costumes. Obviously, the government doesn’t mind Western influence as long as China takes a significant cut. The park was even considered by the Chinese state newspaper Global Times as proof that the park was “defying ‘anti-US’ stereotype painted by Western media.”
But the Global Times and Chinese ambassador’s account is only half the truth: Outside the park, Beijing is giving American filmmakers a hard time. China allows major U.S. studios to show only 34 films in China per year, while rights holders must also settle for a low 25 percent of ticket revenues. The Chinese government, which oversees China’s entertainment industry, sets release dates. It also regulates how much publicity a film receives and how many theaters are allowed to show the movies. US productions now make many concessions to get their films approved in China, from casting Chinese actors to including Chinese elements in the script. Of the current top 20 movies at China’s box office, only four are American.
Hollywood long needs China more than China needs Hollywood. In 2020, the People’s Republic came in at $3.1 billion in movie ticket revenue, while the U.S. came in at just $2.3 billion. According to a report released in February, China now has more than 75,500 movie theaters. The U.S. only had about 41,000 in 2020. China has become too lucrative for Hollywood to resist. One way to circumvent restrictions is to establish a co-production in which at least one-third of the financing comes from Chinese hands and the lead actors are Chinese.
Beijing is pursuing a clear strategy: movie audiences are being educated to watch Chinese films. And the plan is working. In recent years, and especially during the Covid epidemic, it has become apparent that consumer preferences in China are taking a new direction. In particular, the so-called Generation Z, born between 1995 and 2010, is now turning to Chinese brands and traditional Chinese culture.
They no longer consider Made-in-China products inferior. This is not only owed to political pressure, but also to the fact that Chinese films are getting better, and Chinese people are naturally more interested in Chinese topics. With growing confidence, they have also honed their sensitivity to stereotypical Western depictions of Asian and especially Chinese culture. This is evident by the waning interest in “Transformers” or “Fast & Furious” series, which are also receiving bad press in Chinese state media.
Nevertheless, Transformers is also one of the most visited attractions at Universal Park. Driven by the central government, mainland filmmakers are moving into new, rich genres like science fiction. Movies from neighboring Asian countries are also improving. These movies also have closer cultural ties to Chinese audiences than US productions, a fact that is being rewarded in no small part by audiences in smaller cities that are increasingly being connected to the People’s Republic’s growing cinema network. It will be a great many years, however, before there will be a Chinese park on par with U.S. productions. And how long it will take for the first Chinese park to be as attractive as Universal’s in Beijing remains to be seen.
The 2021 federal elections in Germany not only mark a pivotal moment for German politics, they also will have implications beyond Germany. Outgoing chancellor Merkel was recognized and valued as a leadership figure and trusted partner by heads of governments around the world. In her 16 years in office, she worked with four US presidents, three EU Commission presidents, two Chinese presidents, and participated in over 100 EU Council summits. Former US President Barack Obama went as far as labeling Merkel the Liberal West’s last defender. So what will be the impact of Merkel’s departure and on international politics, in particular the EU-US-China relations?
1. Germany’s foreign policy will not change dramatically. There is a lot of speculation that with Merkel gone, Germany will change its foreign policy course and, in particular, take a significantly tougher approach towards China. While the proponents for such a shift have grown in numbers and extend from civil society groups to significant parts of the German business community, any policy shifts will be limited in scope. Why? Even though the German public is in principle in favor of a values-driven foreign policy, there is an even deeper underlying preference for dialogue and an outright aversion to policies that escalate tensions. Linked to this, a key reason for Germany’s relevance under Chancellor Merkel specifically derives from Germany’s positioning as a moderating force between East and West.
Add to this Germany’s export-oriented business model, and it is clear that Germany has both a strategic and tactical interest in remaining a trusted and independent interlocutor and partner for both East and West. So, while there may be some changes in tonality, a fundamental change in foreign policy is unlikely, as Germany’s top leaders know that that would make progress on key German priorities such as climate change and international stability even more challenging. For all these reasons, a major policy shift is unlikely – that is unless China was to take actions (e.g. on Taiwan) that would force Germany to choose sides.
2. Electoral considerations will be top-of-mind for the Franco-German axis until mid-2022 Following Brexit, Europe more than ever depends on the functioning of the Franco-German engine, which is essential for progress on any major policy topic.
Even though building a German government will take some time, the fact that Germany is holding the G7 presidency from 1 January 2022 means the next Chancellor will seek to leverage the opportunity to quickly establish themselves as Merkel’s rightful successor. France’s President Macron is facing elections in May 2022 and will seek to present himself as a global leader in an uncertain world – for that to succeed, he will need close support of the next German chancellor, who is likely to provide a helping hand, given the stakes of the French elections for Europe. Hence, we can expect the Franco-German tandem active on the international front, but with a keen eye towards the electoral implications.
3. President von der Leyen will seek to fill the vacuum by leveraging the EU’s regulatory powers. Merkel’s exit and Macron’s election campaign create a leadership vacuum that EU Commission President will try to fill. Having managed to increase the EU Commission’s relevance during the COVID crisis through the creation (and right to make access to funds conditional on member states’ compliance with EU fundamental rights) of the €750 billion EU recovery fund, von der Leyen is now seeking to leverage the power vacuum presented by Merkel’s leaving to increase the Commission’s influence in EU and international affairs. To this end, she is seeking to leverage the Commission’s powers in key areas from trade policy to climate change to legislation.
A key initiative that will impact both EU and global businesses will be the forthcoming EU supply-chain legislation that could well become a game-changer for EU market access (still the world’s largest market) and global value chains, which will have to adhere to significantly increased transparency obligations and ESG/human right standards -aligning economic, ethical, and environmental aspects to establish a triple-E gold standard. Every corporate with supply chains and business partners, in particular in emerging markets, will face the challenge to ensure full transparency and force its partners to fully comply with ESG standards.
4. Europe will emancipate itself from both the US and China. The Biden administration’s efforts to smooth over the transatlantic fallout over the AUKUS-alliance does not change the obvious fact underlying Europe’s exclusion: the US-EU relationship will not get back to where it was in the post-WWII era. The harsh reality is that Europe is no longer the US’s #1 priority.
The realization among European leaders following Trump’s election that Europe can no longer rely on the US has only been confirmed by recent events. And while the US and Europe may share common values, the EU’s interests, positions, and approaches with regard to China are certainly not identical. Biden has recognized this and has sensibly stopped spending political capital on some issues such as 5G. While the next German chancellor will still seek to strengthen transatlantic cooperation, Germany’s incoming leaders certainly share the view that Europe must take its fate into its own hands and do more to protect its strategic economy and interests. Interestingly, China, Europe, and the US all follow a similar playbook of reducing supply-chain vulnerabilities, strengthening their respective industrial bases, and investing in next-generation technologies. As a logical next step, Europe will invest heavily to decrease dependencies on other markets, including the military dependency from the US.
5. The next few months will be critical for the path of global relations. At the UN Annual Summit last week, there was a palpable sense that we are at a critical juncture for global political dynamics. Both US president Biden and China’s President Xi emphasized that they do not aim to lead the world into another Cold War confrontation. The recent 90min phone call between President Biden and President Xi in which both emphasized the need for a sustained dialogue to carefully manage the relationship is a positive sign, but at best a starting point. Depending on how Europe plays its cards it can either be a marginal player in this great power arena or a relevant force that can help reduce tensions and help create dialogue on key challenges where cooperation is possible and essential – from climate change, to inclusive economic growth and human progress, to an ethical and human-centered approach to technological innovation in key areas, from AI to biotech
At the moment, the focus is almost entirely on what divides China, the US, and the rest. However, while power competition is here to stay and requires highest attention, there are numerous areas, where interests are or could be aligned. The upcoming COP summit in Glasgow is an obvious area where progress utterly depends on the ability of the world’s leading powers to work together.
Global and regional stability is another potential area, as the example of Afghanistan shows, where China fears instability could create security risks in China. Another aspect concerns what China’s President Xi has named “Common Prosperity“, a narrative with a long tradition in China, focusing on overcoming poverty and ensuring an equitable society. While approaches to economic policy and regulation differ, there are potential avenues for linkage, for instance, relating to the EU’s focus on fair labor conditions. As a founding member of the UN and signatory to the ILO conventions, China could demonstrate global leadership and recognize all international standards at the ILO, including labor and social standards, thereby aligning with the forthcoming European supply chain legislation.
Conclusion: The world wasn’t flat under Merkel and will stay fluid without her. The 2020s started with the world facing a historic global crisis (COVID). Now, the next year will be critical in setting the path for global relations: it is critical that world leaders carefully manage existing tensions and find the courage to rise above national interests, and find avenues for consensus to tackle the challenges humankind and our planet are facing. The next German government will need to play a key role in ensuring Europe acts as a constructive and valued party
Joachim Koschnicke is a partner for government relations at the consultancy Finsbury Glover Hering (FGH) in Berlin, where he co-heads the China Desk. Prior to that, he advised Angela Merkel as a strategist in the 2017 election campaign. From 2013 to 2017, he worked in political communications at General Motors Europe.
China went wine-producing. And the result looks really tasty. In the province of Hebei, which surrounds Beijing, this vintner is preparing for the harvest. China’s vintners are already cultivating 855,000 hectares with vines. By now, the country is even surpassing France with 850,000 hectares. It is only behind Spain with 960,000 hectares.
The German federal election is over, the final results are in – but everything else remains open. Who will become the new chancellor? With which coalition? Christiane Kühl takes the interim phase as an opportunity to look back at 16 years of Angela Merkel’s China policy. Her analysis covers a certain like-minded thinking, the early interest in an upcoming superpower, but also the wishes of the German economy.
Angela Merkel was also a topic of discussion in Beijing on Monday. She has always attributed great value to the advancement of Chinese-German relations, the Chinese foreign ministry’s press conference said. “China appreciates this greatly,” said Foreign Ministry spokeswoman Hua Chunying, adding hope and expectation that the new German government would continue this balanced China policy.
Meanwhile, Universal Studios, located on the outskirts of Beijing, has opened its world’s largest amusement park. From Harry Potter to the Minions to the Transformers, here, America’s soft power can be marveled at in its purest form. Within a minute, all tickets were sold out. Obviously, Beijing doesn’t mind Western influence as long as China makes good money from it, since the park is only one side of the medal. In his analysis, Frank Sieren shows how America’s film studios now have to dance to Beijing’s tune should they wish access to the huge market at all.
I hope our latest issue provides you with many new insights!
In the summer of 2005, political China began to take an interest in the German chancellor candidate. At the time, Angela Merkel was an unknown quantity in Beijing. She had been to China once in 1997 as minister of the environment under then-Chancellor Helmut Kohl but had left no lasting impression. So the question in Beijing was: What would the CDU do differently from SPD Chancellor Gerhard Schroeder? The latter was considered pro-business and pro-China; among other things, he had advocated lifting the EU arms embargo imposed after the 1989 Tiananmen massacre. Merkel, on the other hand, saw no indications for corresponding conditions in the Bundestag in April 2005.
The arms embargo remains in place even today. In all other respects, Angela Merkel did not meet Beijing’s fears of a huge shift. It is true that behind the scenes she promoted human rights and civil society in China somewhat more than Schroeder, who had largely passed these issues to his foreign minister Joschka Fischer. But Merkel, too, always had the interests of the German economy in mind. Like Schroeder, she traveled to China every year with many company representatives among her delegation. And she, too, paid respect to China for its rapid growth.
Angela Merkel – known in China as 默克尔 Mo Ke Er – also held a great curiosity in the country and its radically different way of handling things. That’s why she always traveled further afield to China’s provinces, such as Jiangsu, Hubei, Anhui, and Guangdong, during her state visits to Beijing. Merkel also showed some understanding of the administrative difficulties of governing such a large and diverse country. During background talks, she sometimes discussed with journalists how much democracy was possible in China. And shared astute observations that could not be quoted.
In her 16 years as chancellor, Merkel accompanied China’s tremendous rise – and the growing importance of China for the German economy. German exports to China have more than quadrupled since she took office, to around €96 billion at last count. China has been Germany’s biggest trading partner for the past five years, with a trading volume of almost €213 billion. In addition, German companies invest billions in the People’s Republic.
Today, China is striving to be a global power, seeking to help shape geopolitics and have a say in global technology standards. Without China, effective climate protection will not be possible. “The German chancellor has had China’s growing strength in mind from the very beginning,” her former adviser and later UN ambassador Christoph Heusgen recently told German magazine, Der Spiegel. “She was aware early on: this is a global power in the making.” This was the reason for her frequent travels to China and why she launched the bilateral government consultations in 2010 – a format reserved for close partners that brings all ministers from both nations together at one table. “This intense attention to China was farsighted and valid,” Heusgen said.
Many current topics already emerged during Merkel’s early years: The EU, for example, was already wary of China as a competitor even in the years following Merkel’s first election victory in 2005. Companies feared a closing off of the Chinese market and a deterioration of the investment climate, according to the EU Chamber of Commerce’s EUCCC position paper published in 2007 – just like in the chamber’s new paper published last week (China.Table reported). And just like now, there have been complaints about increasing censorship – as Beijing then began to take stronger action against the freedom of the growing Internet.
In 2007, Merkel met with the Dalai Lama, the spiritual leader of the Tibetans, at the Federal Chancellery. That caused a serious, but not lasting, displeasure in Beijing. During the euro crisis resulting from the global financial crisis of those years, China bought substantial amounts of bonds issued by euro debtor nations to stabilize the situation. Wen Jiabao, then prime minister, repeatedly pledged his support for the euro. Something, according to observers, Merkel was grateful for.
At that time, the German chancellor became China’s primary contact in Europe. “This phase, from about 2008 to 2014, left Merkel with the discernible impression that there was a like-minded thinking that transcended ideological boundaries,” writes Andreas Rinke in the journal Internationale Politik (IP) of the German Council on Foreign Relations (DGAP). “Moreover, their Chinese interlocutors shared their interest in the multilateral world order as a counter-model to the sole dominance of the US and its dollar.“
Xi Jinping’s inauguration as the leader of the CCP and President of China in 2013 marked a turning point. From then on, China acted more confident – and it became apparent that the hope expressed in the formula “change through trade” for a political opening of the system as a result of growing prosperity was not met. On the contrary, Xi himself abolished the term limits for his presidency, expanded censorship, jailed human rights lawyers, and ruled with an increasingly iron fist in Xinjiang and, most recently, in Hong Kong.
Merkel criticized all this but pushed ahead with a close cooperation with China. During Xi’s inaugural visit to Berlin in March 2014, both sides agreed on a strategic partnership – which explicitly covered foreign and security policy. At the time, there were already 60 different dialogue and cooperation formats. At the press conference, Merkel said, “Today we talked about the fact that political trust is also furthered by sharing common ground, by breaking new ground, but also being able to exchange different opinions and talk very intensively about all matters.” It’s a mantra to which she has remained true to this day. In 2014 a financial dialogue and closer cooperation within the UN and the G20 was decided on. “Merkel wanted to gradually move the economic giant toward greater involvement in international organizations and thereby rein it in at the same time,” Rinke writes.
Then came 2016, a year of shocks. In May, the Chinese Midea group took over German robotics manufacturer Kuka: for the first time, a real flagship company fell to a Chinese company, as no domestic buyer had been found. The election of Donald Trump in November 2016 also changed the global macro-weather. Merkel now navigated Germany’s relations with China in an environment increasingly dominated by global crisis management.
During this period, Germany raised the hurdles for foreign companies trying to enter strategic sectors – especially with China in mind. From 2017 onwards, Merkel began to rely more on Europe, as she lost confidence in the US in the face of Donald Trump’s hostile behavior.
And so Merkel did not follow Trump’s China policy. When he directed the ban beam at Chinese telecommunications supplier Huawei, she refrained. In the dispute over whether Huawei should be allowed to participate in the construction of the German 5G network, Merkel pushed for strict security standards instead of a Huawei ban – also out of concern for disadvantages for German companies in China. Corresponding rules were adopted by the federal government in 2020; so far, however, network operators have only contracted European firms. By contrast, the UK, France, and Sweden, as well as the US, have formally excluded Huawei from 5G deployment.
It is also due to such decisions, Europe has recently been repeatedly accusing Merkel of a unilateral China policy. Germany is too economically dependent on China, it was said. That’s why Berlin doesn’t dare to take a tougher line in response to Xi’s authoritarian tendencies and human rights violations in Xinjiang and Hong Kong. During her EU presidency, Merkel pushed ahead with the signing of the CAI investment agreement, which was signed in December 2020 – and is now shelved due to Chinese sanctions against European politicians and think tanks. The last government consultations with China were held in April – albeit virtually because of the pandemic.
Merkel wanted to ensure continuity in the difficult relationship with the new superpower even after the end of her chancellorship. And so she appointed her chief foreign policy adviser and close confidant Jan Hecker as the new ambassador in Beijing. But Hecker unexpectedly passed away in August at just 54, mere days after taking office (China Table reported). So now, after Hecker’s tragic death, Merkel’s successor is expected to appoint the next ambassador. Foreign nations expect Germany’s new chancellor – be it Olaf Scholz or Armin Laschet – to adopt a tougher China policy.
In the midst of diplomatically troubled times, a symbol of American culture has taken up residence on the outskirts of the Chinese capital. Universal Studios’ world’s largest amusement park in Beijing opened its gates to the public last week. Tickets were gone within the minute. The hotel rooms, which cost up to $3,000, were also booked out quickly.
Yet the park is dominated by Western worlds: Harry Potter, Minion Land, Jurassic World, and Transformers. So America’s soft power still seems to pull despite the emphasis on the independence of Chinese culture. The only thing in the park that conveys at least some Chinese culture, albeit interpreted in a US-American way, is Kung-Fu Panda – and it only had the fewest visitors in the first few days.
Qin Gang, China’s ambassador to Washington and one of the first visitors to the park, even declared a ride on the Harry Potter roller coaster a metaphor for US-China relations: “After all tumbling and shakes, the roller coaster came to a soft landing in the end,” he wrote on Twitter on Tuesday.
According to China’s state media, the four-square-kilometer park is expected to attract more than ten million guests per year and generate annual sales of the equivalent of €1.3 billion. The “Universal Beijing Resort” in the Tongzhou district is located around 30 kilometers from the city center of Beijing. The complex includes two large hotels, 80 restaurants, 24 stage shows, and 37 Hollywood attractions.
Universal Beijing Resort is owned by Beijing International Resort, a joint venture between Beijing Shouhuan Cultural Tourism Investment Co. Ltd. and Universal Parks & Resorts, a business unit of Comcast NBCUniversal. The Chinese own 70 percent of the project, while NBCUniversal holds the remaining 30 percent. The equivalent of €6.5 billion was invested in the park, according to media reports. It is Universal Studios’ fifth amusement park worldwide, following its counterparts in Hollywood, Orlando, Singapore, and Osaka.
The opening of the park, which has been under construction since 2015, was postponed for several months due to the Covid pandemic. Visitors still need to wear masks, maintain distance, and register themselves with a health app. The temperature is also taken at the entrance. Admission for an adult is currently €41.50. A new subway stop has even been built primarily for the trip to the park.
Song Yu, head of Beijing Tourism Group, one of the park’s major shareholders, said the Universal Beijing Resort “showcases Sino-American cooperation.” Indeed, the opening happens at a time when political relations between China and the US remain difficult and efforts by American companies to expand their business in China remain challenging.
Harry Potter is the big hit, even if you have to wait in line for 90 minutes to get in. And although it’s not the most spectacular attraction, it should be noted that many visitors, adults, and children, even arrived in matching wizard costumes. Obviously, the government doesn’t mind Western influence as long as China takes a significant cut. The park was even considered by the Chinese state newspaper Global Times as proof that the park was “defying ‘anti-US’ stereotype painted by Western media.”
But the Global Times and Chinese ambassador’s account is only half the truth: Outside the park, Beijing is giving American filmmakers a hard time. China allows major U.S. studios to show only 34 films in China per year, while rights holders must also settle for a low 25 percent of ticket revenues. The Chinese government, which oversees China’s entertainment industry, sets release dates. It also regulates how much publicity a film receives and how many theaters are allowed to show the movies. US productions now make many concessions to get their films approved in China, from casting Chinese actors to including Chinese elements in the script. Of the current top 20 movies at China’s box office, only four are American.
Hollywood long needs China more than China needs Hollywood. In 2020, the People’s Republic came in at $3.1 billion in movie ticket revenue, while the U.S. came in at just $2.3 billion. According to a report released in February, China now has more than 75,500 movie theaters. The U.S. only had about 41,000 in 2020. China has become too lucrative for Hollywood to resist. One way to circumvent restrictions is to establish a co-production in which at least one-third of the financing comes from Chinese hands and the lead actors are Chinese.
Beijing is pursuing a clear strategy: movie audiences are being educated to watch Chinese films. And the plan is working. In recent years, and especially during the Covid epidemic, it has become apparent that consumer preferences in China are taking a new direction. In particular, the so-called Generation Z, born between 1995 and 2010, is now turning to Chinese brands and traditional Chinese culture.
They no longer consider Made-in-China products inferior. This is not only owed to political pressure, but also to the fact that Chinese films are getting better, and Chinese people are naturally more interested in Chinese topics. With growing confidence, they have also honed their sensitivity to stereotypical Western depictions of Asian and especially Chinese culture. This is evident by the waning interest in “Transformers” or “Fast & Furious” series, which are also receiving bad press in Chinese state media.
Nevertheless, Transformers is also one of the most visited attractions at Universal Park. Driven by the central government, mainland filmmakers are moving into new, rich genres like science fiction. Movies from neighboring Asian countries are also improving. These movies also have closer cultural ties to Chinese audiences than US productions, a fact that is being rewarded in no small part by audiences in smaller cities that are increasingly being connected to the People’s Republic’s growing cinema network. It will be a great many years, however, before there will be a Chinese park on par with U.S. productions. And how long it will take for the first Chinese park to be as attractive as Universal’s in Beijing remains to be seen.
The 2021 federal elections in Germany not only mark a pivotal moment for German politics, they also will have implications beyond Germany. Outgoing chancellor Merkel was recognized and valued as a leadership figure and trusted partner by heads of governments around the world. In her 16 years in office, she worked with four US presidents, three EU Commission presidents, two Chinese presidents, and participated in over 100 EU Council summits. Former US President Barack Obama went as far as labeling Merkel the Liberal West’s last defender. So what will be the impact of Merkel’s departure and on international politics, in particular the EU-US-China relations?
1. Germany’s foreign policy will not change dramatically. There is a lot of speculation that with Merkel gone, Germany will change its foreign policy course and, in particular, take a significantly tougher approach towards China. While the proponents for such a shift have grown in numbers and extend from civil society groups to significant parts of the German business community, any policy shifts will be limited in scope. Why? Even though the German public is in principle in favor of a values-driven foreign policy, there is an even deeper underlying preference for dialogue and an outright aversion to policies that escalate tensions. Linked to this, a key reason for Germany’s relevance under Chancellor Merkel specifically derives from Germany’s positioning as a moderating force between East and West.
Add to this Germany’s export-oriented business model, and it is clear that Germany has both a strategic and tactical interest in remaining a trusted and independent interlocutor and partner for both East and West. So, while there may be some changes in tonality, a fundamental change in foreign policy is unlikely, as Germany’s top leaders know that that would make progress on key German priorities such as climate change and international stability even more challenging. For all these reasons, a major policy shift is unlikely – that is unless China was to take actions (e.g. on Taiwan) that would force Germany to choose sides.
2. Electoral considerations will be top-of-mind for the Franco-German axis until mid-2022 Following Brexit, Europe more than ever depends on the functioning of the Franco-German engine, which is essential for progress on any major policy topic.
Even though building a German government will take some time, the fact that Germany is holding the G7 presidency from 1 January 2022 means the next Chancellor will seek to leverage the opportunity to quickly establish themselves as Merkel’s rightful successor. France’s President Macron is facing elections in May 2022 and will seek to present himself as a global leader in an uncertain world – for that to succeed, he will need close support of the next German chancellor, who is likely to provide a helping hand, given the stakes of the French elections for Europe. Hence, we can expect the Franco-German tandem active on the international front, but with a keen eye towards the electoral implications.
3. President von der Leyen will seek to fill the vacuum by leveraging the EU’s regulatory powers. Merkel’s exit and Macron’s election campaign create a leadership vacuum that EU Commission President will try to fill. Having managed to increase the EU Commission’s relevance during the COVID crisis through the creation (and right to make access to funds conditional on member states’ compliance with EU fundamental rights) of the €750 billion EU recovery fund, von der Leyen is now seeking to leverage the power vacuum presented by Merkel’s leaving to increase the Commission’s influence in EU and international affairs. To this end, she is seeking to leverage the Commission’s powers in key areas from trade policy to climate change to legislation.
A key initiative that will impact both EU and global businesses will be the forthcoming EU supply-chain legislation that could well become a game-changer for EU market access (still the world’s largest market) and global value chains, which will have to adhere to significantly increased transparency obligations and ESG/human right standards -aligning economic, ethical, and environmental aspects to establish a triple-E gold standard. Every corporate with supply chains and business partners, in particular in emerging markets, will face the challenge to ensure full transparency and force its partners to fully comply with ESG standards.
4. Europe will emancipate itself from both the US and China. The Biden administration’s efforts to smooth over the transatlantic fallout over the AUKUS-alliance does not change the obvious fact underlying Europe’s exclusion: the US-EU relationship will not get back to where it was in the post-WWII era. The harsh reality is that Europe is no longer the US’s #1 priority.
The realization among European leaders following Trump’s election that Europe can no longer rely on the US has only been confirmed by recent events. And while the US and Europe may share common values, the EU’s interests, positions, and approaches with regard to China are certainly not identical. Biden has recognized this and has sensibly stopped spending political capital on some issues such as 5G. While the next German chancellor will still seek to strengthen transatlantic cooperation, Germany’s incoming leaders certainly share the view that Europe must take its fate into its own hands and do more to protect its strategic economy and interests. Interestingly, China, Europe, and the US all follow a similar playbook of reducing supply-chain vulnerabilities, strengthening their respective industrial bases, and investing in next-generation technologies. As a logical next step, Europe will invest heavily to decrease dependencies on other markets, including the military dependency from the US.
5. The next few months will be critical for the path of global relations. At the UN Annual Summit last week, there was a palpable sense that we are at a critical juncture for global political dynamics. Both US president Biden and China’s President Xi emphasized that they do not aim to lead the world into another Cold War confrontation. The recent 90min phone call between President Biden and President Xi in which both emphasized the need for a sustained dialogue to carefully manage the relationship is a positive sign, but at best a starting point. Depending on how Europe plays its cards it can either be a marginal player in this great power arena or a relevant force that can help reduce tensions and help create dialogue on key challenges where cooperation is possible and essential – from climate change, to inclusive economic growth and human progress, to an ethical and human-centered approach to technological innovation in key areas, from AI to biotech
At the moment, the focus is almost entirely on what divides China, the US, and the rest. However, while power competition is here to stay and requires highest attention, there are numerous areas, where interests are or could be aligned. The upcoming COP summit in Glasgow is an obvious area where progress utterly depends on the ability of the world’s leading powers to work together.
Global and regional stability is another potential area, as the example of Afghanistan shows, where China fears instability could create security risks in China. Another aspect concerns what China’s President Xi has named “Common Prosperity“, a narrative with a long tradition in China, focusing on overcoming poverty and ensuring an equitable society. While approaches to economic policy and regulation differ, there are potential avenues for linkage, for instance, relating to the EU’s focus on fair labor conditions. As a founding member of the UN and signatory to the ILO conventions, China could demonstrate global leadership and recognize all international standards at the ILO, including labor and social standards, thereby aligning with the forthcoming European supply chain legislation.
Conclusion: The world wasn’t flat under Merkel and will stay fluid without her. The 2020s started with the world facing a historic global crisis (COVID). Now, the next year will be critical in setting the path for global relations: it is critical that world leaders carefully manage existing tensions and find the courage to rise above national interests, and find avenues for consensus to tackle the challenges humankind and our planet are facing. The next German government will need to play a key role in ensuring Europe acts as a constructive and valued party
Joachim Koschnicke is a partner for government relations at the consultancy Finsbury Glover Hering (FGH) in Berlin, where he co-heads the China Desk. Prior to that, he advised Angela Merkel as a strategist in the 2017 election campaign. From 2013 to 2017, he worked in political communications at General Motors Europe.
China went wine-producing. And the result looks really tasty. In the province of Hebei, which surrounds Beijing, this vintner is preparing for the harvest. China’s vintners are already cultivating 855,000 hectares with vines. By now, the country is even surpassing France with 850,000 hectares. It is only behind Spain with 960,000 hectares.
