German Chancellor Olaf Scholz pleaded for fairness on Monday morning, setting the tone for his talks with China’s Premier Li Qiang on Tuesday. Speaking before students at Tongji University, he painted a scenario of economic competition between Germany and Europe on the one side and China on the other, which is far from true.
Coincidence or planned – EU Commission President Ursula von der Leyen has simultaneously reiterated her call for punitive tariffs on electric cars from the People’s Republic. Her remarks will probably irritate Scholz, writes Felix Lee. France and most EU member states support punitive tariffs, while Germany opposes them.
The People’s Republic of China, which is a master at driving wedges deep into the alliances and partnerships of others, is once again likely to benefit from the disagreements between Berlin and Brussels. This raises the question not only of fairness, but also of China expertise, which Germany and Europe are to build up urgently. Lesson number one: present a united front.
And please don’t criticize China for this, pleads Alexander Gabuyev in an interview with Michael Radunski. However, the Director of the Carnegie Russia Eurasia Center was not referring to the Europeans’ debates on punitive tariffs, but to geopolitical complications that Scholz will discuss with the Chinese government today.
Gabuyev predicts the same Chinese divide-and-conquer strategy when it comes to China’s role in finding a solution to the Ukraine war. He says that not even Germany speaks with one voice, let alone Europe. And so, Gabuyev doubts that this could lead to success.
Nor would it make sense to count on Chinese influence on Iran. On the contrary, Gabuyev believes Beijing’s willingness to meddle in regional diplomacy is extremely low.
German Chancellor Olaf Scholz is trying to prevent what can no longer be prevented: punitive tariffs on Chinese EV imports. During a discussion with students at Tongji University on the second day of his China visit, he almost begged for fair competition.
He said there should be no dumping, no overproduction and copyrights should not be impaired. He also said it was important to him that companies were allowed to set up production facilities without being hampered by bureaucratic hurdles. That is why he is pushing for a level playing field. “Of course we would like our companies to have no restrictions, but conversely we behave exactly how we are demanding here,” said Scholz in front of around 250 students, who are, however, only a backdrop. His appeal was actually directed at the Chinese leadership in Beijing, which he will meet the next day – and at the EU Commission.
The background to his plea is the EU’s anti-subsidy investigation into electric cars manufactured in China. Brussels has been investigating since last fall. The suspicion is market distortion. The EU Commission suspects that state subsidies are being used to ensure that Chinese manufacturers can offer their EVs in Europe at significantly lower prices than European carmakers.
Whether by coincidence or on purpose, coinciding with Scholz’s trip to China, EU Commission President Ursula von der Leyen has once again clearly expressed her support for punitive tariffs on electric cars from the People’s Republic. Even though the investigation is still ongoing, she spoke to the Redaktionsnetzwerk Deutschland (RND) about a “drastic overproduction of electric vehicles in China, coupled with massive state subsidies.”
She pointed out that the US has already closed off its market, as have Brazil, Mexico and Turkey. The EU cannot be the only market that remains open to Chinese overproduction, she lamented. She added: “We must not experience the same thing in Europe that happened with solar panels: that European manufacturers are unfairly forced out of the market by state-subsidized dumping prices and the bottom line is that production then goes to China.” German economists have also urgently warned of China’s destructive overcapacity.
The EU Commission President’s remarks are likely to upset Scholz. France and most EU member states favor punitive tariffs, while Germany opposes them. The German government fears retaliatory measures by the Chinese. That is why Scholz is sure to have the German car manufacturers on his side. While French carmakers, for example, have had hardly any market share in China for some time now, German carmakers fear for their sales in their most important market. They already find it difficult to maintain their leading positions as it is. They are now lagging considerably behind their Chinese competitors in the EV segment.
In Shanghai, Scholz again appealed to the Chinese side to ensure free car markets and fair competition. He said he would address the issue of a level playing field – more to the German journalists and Ursula von der Leyen in Brussels than to the students present. “But this must be done from a position of self-confident competitiveness and not from protectionist motives.” Scholz also intends to touch on this economic issue during talks with the Chinese leadership in Beijing on Tuesday. The high-ranking business delegation accompanying him on his three-day visit to China also includes the CEOs of BMW and Mercedes.
However, Scholz is likely to hit a brick wall in Beijing. The Chinese leadership is well aware of the problem of overcapacity. After all, it also harms its own economy. But the overcapacity is intrinsic to the system, as Joerg Wuttke, former President of the EU Chamber of Commerce in China, has been pointing out for some time. Despite all the reforms and its rise to become the second-largest economy in the world, the People’s Republic has always remained a planned economy over the decades.
The leadership presents plans and everyone knows that the money needed for them will be provided. This is then replicated in all 30 provinces. In the West, overcapacity is punished with bankruptcies, explains Wuttke. That doesn’t happen in China. Even poorly performing companies do not go bankrupt. They are supported by the local governments. So they continue to produce diligently. The many goods then end up on the global market. That was the case ten years ago with steel and aluminum, now it’s the case with solar panels and electric cars.
China’s EV manufacturers have created production capacities for 50 million cars, but their own market can only handle sales of around 23 million. The rest now end up on the global market. And because the US, Japan, and other countries have already imposed high tariffs on Chinese EV imports, even more are set to land in Europe in the coming months – at ultra-low prices.
Scholz’s timing is also late. After all, the anti-dumping tariffs on Chinese EVs could happen quite quickly – with no option for Berlin to intervene. Since October 4, 2023, the EU Commission has been conducting an investigation into state subsidies for Chinese e-cars. This allows the Brussels authority to impose provisional tariffs up to nine months after initiation if justification is found – in this case until July 4.
However, the European elections will be held in early June, which is why observers believe that the current EU Commission wants to lock in the provisional tariffs before then. The member states, which are represented by the EU Council, have no say in this, as the EU is responsible for trade policy. Brussels must then set final tariffs no later than 13 months after initiation, i.e., by November.
The only thing that is still unclear is how high the anti-dumping tariffs will be. EU observers expect a low, double-digit figure. Contribution: Amelie Richter
Recent US reports suggest that China supports the Russian war machine in Ukraine. How big is China’s support?
It’s crucial. These deliveries really help Russia rebuild and improve its war machine to destroy Ukraine. It’s not normal trade for civilian purposes, like the purchase of Russian oil, which is being accepted by the West grudgingly. This is about military-critical support.
China rejects the accusations. What role does Beijing play here?
We see that China is a very active fence-sitter that is supporting Russia without crossing the publicly stated American and European red lines: no supply of lethal weapons to Russia and no overt violation of sanctions. But the realities on the battlefield changed, and right now, America is trying to move its red lines that it communicated to the Chinese very early on. By doing that, the US also puts pressure on Europe for a more active role.
It is fitting that German Chancellor Olaf Scholz is meeting China’s President Xi Jinping in Beijing today. What should the Chancellor do?
It would be best if he took a very pragmatic and pointed approach. Scholz could tell Xi that there is new information in the West on how China is supporting the Russian military, and Germany wants that to stop. Stop exporting optics for the Russian tanks or providing satellite imagery for Russian reconnaissance.
But it seems to me that you expect something else from Scholz.
I expect Scholz to take a broader approach. Something like: We’re seeing that you’re not abandoning Russia and not doing enough to Ukraine. That’s bad. That’s damaging your reputation. You should reconsider. – Don’t get me wrong. All of this is correct. But it’s also not enough anymore. It does not impress the Chinese. Therefore I hope that the new information revealed by the US and shared with partners, including in Berlin, will lead to an injection of a more resolute approach.
What options does the Chancellor have to exert pressure on the Chinese leadership?
Here’s the problem. Sticks need to be transatlantic and European in nature. If Americans don’t put companies like Hikvision and others on sanctions lists, those companies could still work within the European Union, including Germany. So you need a united approach: Name Chinese companies or sectors that are supporting the Russian military machine and tell Xi Jinping: We will limit their ability to do business in Europe or Germany. But Germany doesn’t have a sanctions program of its own, so it needs to be implemented by the European Union.
You sound pessimistic. On his previous visit to Beijing, Scholz managed to coax Xi Jinping to disapprove of Russia’s nuclear threats. Surely that was a success.
That was a success, no doubt. By that time, the US really considered the risk of Putin using nuclear weapons in the fall of 2022 very high. So they pursued various channels: brought material to Poland and Ukraine that would help the population if Russia chose to use nuclear weapons. They also talked to the Russians and threatened them with consequences. They advised the Ukrainians not to try to enter Crimea militarily. They talk to countries like India and China. And they also ask Europeans to have these conversations with Beijing. In this multifaceted effort, Scholz was one piece of the messaging. And yes, it has worked ultimately.
What can Scholz hope to achieve this time?
That’s difficult. I think that China is ever more reluctant to really change its course. The current trajectory of the war is working quite okay for China. Russia is having momentum on the battlefield, whereas President Zelensky’s maximalist formula – that Russia first withdraws from all occupied Ukrainian territory, including Crimea – simply does not reflect the realities on the battlefield.
If the current situation is acceptable for China, why is Beijing dispatching a peace ambassador like Li Hui?
Don’t be distracted by appearances. There is the officially stated mission, which is: We want to have negotiations. We want to find where the positions are and maybe bring them closer. In reality, this is more of an information-collection mission than a peace approach. Li Hui mainly wants to find out when might be the right time for China to step in more actively. Is it not the time yet, and it’s good to kind of hold back.
And the other part?
The other big part of Li Hui’s mission is influencing the global audience in the developing world, in the so-called global South. There, China says all the time: Look, China is the only country that has a special envoy for peace who travels to Moscow and Kyiv and to all the regional capitals. Who else is doing that – Europe? The US? Only China.
But Scholz has a good connection to China. Foreign Minister Annalena Baerbock and Economics Minister Robert Habeck are viewed much more critically in Beijing. Is this the strength of the good cop, bad cop or more of a weakness towards China?
It’s a weakness, in my view. It would be more beneficial to speak with one voice. Beijing will drive a wedge into these differences. And that’s true not only for Germany’s ruling coalition but also for the European Union. And sorry, but don’t blame China for that. That’s what diplomacy really is about.
Given the current events in the Middle East, another question is: Could China influence Iran’s actions?
We haven’t seen an active Chinese role in regional diplomacy since the October 7th terrorist attack, the ensuing war in Gaza, and broader regional escalation. I don’t share hyperventilation about Beijing’s ability to engage in regional diplomacy.
But China brokered an agreement between arch-enemies Iran and Saudi Arabia last year. At the time, some even believed China could replace the United States as a regional power.
But this is not supported by facts. In Beijing, the two found a player who, above all, provided the logistics for the talks. But even this agreement remains mainly on paper. China hasn’t dissuaded the Houthis from disrupting global trade, although PRC ships are now safe. The situation between Iran, Israel and others is very complicated, to say the least. China knows that and doesn’t want to be involved, let alone be in charge.
Alexander Gabuyev is director of the Carnegie Russia Eurasia Center, where he leads a renowned team of analysts who were formerly part of the Carnegie Moscow Center, which was forced to close by the Kremlin in early 2022. His research focuses on Russian foreign policy, the war in Ukraine and Sino-Russian relations.
Following his trip to China and a meeting with China’s Foreign Minister Wang Yi, the former head of the Munich Security Conference, Wolfgang Ischinger, sees a soft distance of China to Russia, which could play a role in the meeting between China’s President Xi Jinping and German Chancellor Olaf Scholz this Tuesday. “My impression is that China is willing to talk to the German colleagues not only about repeating the statement regarding the inadmissibility of Russian use of nuclear weapons, but could even sharpen this statement,” Ischinger told Table.Briefings.
Ischinger had a 30-minute meeting with Wang Yi in Beijing last week. China’s Foreign Minister has also been Director of the Central Foreign Affairs Commission of the Communist Party since 2023, making him China’s highest-ranking foreign policy official.
Therefore, Scholz’s visit to China is “also particularly important regarding the timing,” said Ischinger. While there is an official line in China as a “permanent partner of Russia,” there is also an unofficial line that longs for an end to the conflict as it has economic policy implications for relations with Western developed countries.
Ischinger believes that the relationship with Russia is not a partnership of equals anyway. “China is the boss.” There is a widespread narrative in China that Putin “has made a big mistake with the attack, with false objectives and unattainable goals,” Ischinger says, referring to his talks.
According to Ischinger, China is also particularly sensitive when it comes to nuclear issues because China remembers the military border conflict with Russia at the Ussuri in 1969, where Russia threatened China with a nuclear strike shortly before its defeat. “The older generation in Beijing know very well that Russia has also threatened them in the past.” broe
Federal Chancellor Olaf Scholz expressed his hope for greater scientific exchange with China. This exchange is needed, Scholz said on Monday at Tongji University in Shanghai. During the Covid pandemic, contacts had decreased significantly, which was not good. “But now it’s different again. In this respect, I hope that talks will increase again, as will reciprocal visits,” said Scholz on the second day of his three-day China visit. He pointed to the Chinese students in Germany and said it was good that the number of German students in China was rising again.
In recent years, research collaboration with China has been the subject of critical debate due to geopolitical tensions and security concerns. Scholz said he wanted to talk to the leadership in Beijing on Tuesday about international matters such as climate change, security and stability, as well as the growing integration of the world. rtr/rad
Since Russia’s war of aggression at the very latest, geopolitics has been among the highest priorities of CEOs and board members. According to a survey by Heydrick & Struggles, geopolitical and macroeconomic uncertainties are right at the top of the agendas at company headquarters. The big issues are China, the war in Ukraine, a further escalation in the Middle East and the risk of a second Trump presidency.
When considering the risks associated with China, there is a growing divide between parts of politics and business: While the EU Commission, the German Foreign Office and security authorities urge companies to “de-risk,” DAX CEOs traveling with the German Chancellor on his recent trip to China made it clear that they cannot do without China and that the country remains a key sales market and technology partner.
This divide becomes even wider when looking across the Atlantic: In the US, the tone towards China is becoming increasingly critical and even alarmist in all parties – which will likely intensify during the election campaign. Recent discussions in the White House and Congress have shown this and several publications confirm this. For example, the US House of Representatives published a report with the telling title “How American Venture Capital Fuels the PRC Military and Human Rights Abuses.” In the field of technology, a “decoupling” between the US and China is already in full swing, as evidenced by US export restrictions on semiconductors or stricter “outbound” investment controls on biotechnology or artificial intelligence.
While these measures could still be classified as “tech containment,” more and more influential voices are talking about a “new Cold War” (Niall Ferguson) against China, especially in light of the US government’s evidence of support for Russia with war-relevant goods such as tank parts, satellite images and rocket fuel.
This is one of the reasons why the Marathon Initiative, in whose ranks some Republican security politicians are “hibernating,” is calling for the US military to focus on directly deterring China. The renowned Center for Strategic & International Studies runs through suitable war scenarios. In the Trump camp, think tanks have developed programs for a Republican takeover – all with highly critical stances on China. According to the 920-page strategy paper “Project 2025” by the Heritage Foundation, the Center for Renewing America and the America First Policy Institute, this applies to both security policy and trade issues.
Why should German companies concern themselves with these debates? The relationship between the US – as the other strategic market for European industry – and China is the central axis of international politics in the 21st century and has a significant impact on global trade, energy and raw material security, supply chains, and capital markets. As such, it affects globally active companies’ long-term corporate strategies, business models, and investment planning.
They would be well advised to consider what a “Cold War 2.0” would mean for them. The starting point should be the realistic assumption that Germany’s dependence on the United States will remain high in the medium term (NATO, nuclear umbrella) and the assumption that the United States as a market will retain or expand its competitive advantage in terms of energy prices, financial strength and technology – even under Trump.
Should the conflict between the US and China intensify, Washington will demand that its allies take its side – and use leverage to do so. European companies would not be able to avoid this either – and would then be targeted more strongly by the Chinese side in return. For example, higher bureaucratic hurdles, politically motivated restrictions on business activities, tighter export controls, for instance, on critical raw materials, stricter capital market controls, or more difficult access to the South China Sea would be conceivable. Experts also warn of trade blockades against Taiwan, increased cyberattacks or (punitive) tax measures.
Hopefully, this will not happen and trade with China will remain as open as possible. However, in line with the Business Judgement Rule, management boards must plan for such scenarios. This is also an obligation towards shareholders, employees, and the public. Nobody wants a new Cold War. But being prepared for it is a must for good corporate management.
Jan F. Kallmorgen is partner for Strategy and Transaction Consulting at Ernst & Young. He advises companies and investors on geostrategic matters with his team.
Young Chinese have transformed a seemingly unremarkable park in Chengdu’s Yulin district into a mini Disneyland. Where previously it was mainly pensioners passing the time on gym equipment, young people in costumes of famous Disney characters now come together, film videos and listen to music. The hype originated from a dispute between two rappers from the popular casting show “The Rap of China.” In a song aimed at his opponent Xiedi, the eliminated rapper Nuomi declared “Xièdì, wǒ yào diss nǐ 谢帝,我要diss你”. According to the fans, the English verb “diss,” which in hip-hop slang means to slander the other person, sounded like the Chinese name for Disney: Díshìní 迪士尼. The accompanying music video, which was filmed in that park, went viral, inspiring this astonishing mix of the online and offline worlds.
German Chancellor Olaf Scholz pleaded for fairness on Monday morning, setting the tone for his talks with China’s Premier Li Qiang on Tuesday. Speaking before students at Tongji University, he painted a scenario of economic competition between Germany and Europe on the one side and China on the other, which is far from true.
Coincidence or planned – EU Commission President Ursula von der Leyen has simultaneously reiterated her call for punitive tariffs on electric cars from the People’s Republic. Her remarks will probably irritate Scholz, writes Felix Lee. France and most EU member states support punitive tariffs, while Germany opposes them.
The People’s Republic of China, which is a master at driving wedges deep into the alliances and partnerships of others, is once again likely to benefit from the disagreements between Berlin and Brussels. This raises the question not only of fairness, but also of China expertise, which Germany and Europe are to build up urgently. Lesson number one: present a united front.
And please don’t criticize China for this, pleads Alexander Gabuyev in an interview with Michael Radunski. However, the Director of the Carnegie Russia Eurasia Center was not referring to the Europeans’ debates on punitive tariffs, but to geopolitical complications that Scholz will discuss with the Chinese government today.
Gabuyev predicts the same Chinese divide-and-conquer strategy when it comes to China’s role in finding a solution to the Ukraine war. He says that not even Germany speaks with one voice, let alone Europe. And so, Gabuyev doubts that this could lead to success.
Nor would it make sense to count on Chinese influence on Iran. On the contrary, Gabuyev believes Beijing’s willingness to meddle in regional diplomacy is extremely low.
German Chancellor Olaf Scholz is trying to prevent what can no longer be prevented: punitive tariffs on Chinese EV imports. During a discussion with students at Tongji University on the second day of his China visit, he almost begged for fair competition.
He said there should be no dumping, no overproduction and copyrights should not be impaired. He also said it was important to him that companies were allowed to set up production facilities without being hampered by bureaucratic hurdles. That is why he is pushing for a level playing field. “Of course we would like our companies to have no restrictions, but conversely we behave exactly how we are demanding here,” said Scholz in front of around 250 students, who are, however, only a backdrop. His appeal was actually directed at the Chinese leadership in Beijing, which he will meet the next day – and at the EU Commission.
The background to his plea is the EU’s anti-subsidy investigation into electric cars manufactured in China. Brussels has been investigating since last fall. The suspicion is market distortion. The EU Commission suspects that state subsidies are being used to ensure that Chinese manufacturers can offer their EVs in Europe at significantly lower prices than European carmakers.
Whether by coincidence or on purpose, coinciding with Scholz’s trip to China, EU Commission President Ursula von der Leyen has once again clearly expressed her support for punitive tariffs on electric cars from the People’s Republic. Even though the investigation is still ongoing, she spoke to the Redaktionsnetzwerk Deutschland (RND) about a “drastic overproduction of electric vehicles in China, coupled with massive state subsidies.”
She pointed out that the US has already closed off its market, as have Brazil, Mexico and Turkey. The EU cannot be the only market that remains open to Chinese overproduction, she lamented. She added: “We must not experience the same thing in Europe that happened with solar panels: that European manufacturers are unfairly forced out of the market by state-subsidized dumping prices and the bottom line is that production then goes to China.” German economists have also urgently warned of China’s destructive overcapacity.
The EU Commission President’s remarks are likely to upset Scholz. France and most EU member states favor punitive tariffs, while Germany opposes them. The German government fears retaliatory measures by the Chinese. That is why Scholz is sure to have the German car manufacturers on his side. While French carmakers, for example, have had hardly any market share in China for some time now, German carmakers fear for their sales in their most important market. They already find it difficult to maintain their leading positions as it is. They are now lagging considerably behind their Chinese competitors in the EV segment.
In Shanghai, Scholz again appealed to the Chinese side to ensure free car markets and fair competition. He said he would address the issue of a level playing field – more to the German journalists and Ursula von der Leyen in Brussels than to the students present. “But this must be done from a position of self-confident competitiveness and not from protectionist motives.” Scholz also intends to touch on this economic issue during talks with the Chinese leadership in Beijing on Tuesday. The high-ranking business delegation accompanying him on his three-day visit to China also includes the CEOs of BMW and Mercedes.
However, Scholz is likely to hit a brick wall in Beijing. The Chinese leadership is well aware of the problem of overcapacity. After all, it also harms its own economy. But the overcapacity is intrinsic to the system, as Joerg Wuttke, former President of the EU Chamber of Commerce in China, has been pointing out for some time. Despite all the reforms and its rise to become the second-largest economy in the world, the People’s Republic has always remained a planned economy over the decades.
The leadership presents plans and everyone knows that the money needed for them will be provided. This is then replicated in all 30 provinces. In the West, overcapacity is punished with bankruptcies, explains Wuttke. That doesn’t happen in China. Even poorly performing companies do not go bankrupt. They are supported by the local governments. So they continue to produce diligently. The many goods then end up on the global market. That was the case ten years ago with steel and aluminum, now it’s the case with solar panels and electric cars.
China’s EV manufacturers have created production capacities for 50 million cars, but their own market can only handle sales of around 23 million. The rest now end up on the global market. And because the US, Japan, and other countries have already imposed high tariffs on Chinese EV imports, even more are set to land in Europe in the coming months – at ultra-low prices.
Scholz’s timing is also late. After all, the anti-dumping tariffs on Chinese EVs could happen quite quickly – with no option for Berlin to intervene. Since October 4, 2023, the EU Commission has been conducting an investigation into state subsidies for Chinese e-cars. This allows the Brussels authority to impose provisional tariffs up to nine months after initiation if justification is found – in this case until July 4.
However, the European elections will be held in early June, which is why observers believe that the current EU Commission wants to lock in the provisional tariffs before then. The member states, which are represented by the EU Council, have no say in this, as the EU is responsible for trade policy. Brussels must then set final tariffs no later than 13 months after initiation, i.e., by November.
The only thing that is still unclear is how high the anti-dumping tariffs will be. EU observers expect a low, double-digit figure. Contribution: Amelie Richter
Recent US reports suggest that China supports the Russian war machine in Ukraine. How big is China’s support?
It’s crucial. These deliveries really help Russia rebuild and improve its war machine to destroy Ukraine. It’s not normal trade for civilian purposes, like the purchase of Russian oil, which is being accepted by the West grudgingly. This is about military-critical support.
China rejects the accusations. What role does Beijing play here?
We see that China is a very active fence-sitter that is supporting Russia without crossing the publicly stated American and European red lines: no supply of lethal weapons to Russia and no overt violation of sanctions. But the realities on the battlefield changed, and right now, America is trying to move its red lines that it communicated to the Chinese very early on. By doing that, the US also puts pressure on Europe for a more active role.
It is fitting that German Chancellor Olaf Scholz is meeting China’s President Xi Jinping in Beijing today. What should the Chancellor do?
It would be best if he took a very pragmatic and pointed approach. Scholz could tell Xi that there is new information in the West on how China is supporting the Russian military, and Germany wants that to stop. Stop exporting optics for the Russian tanks or providing satellite imagery for Russian reconnaissance.
But it seems to me that you expect something else from Scholz.
I expect Scholz to take a broader approach. Something like: We’re seeing that you’re not abandoning Russia and not doing enough to Ukraine. That’s bad. That’s damaging your reputation. You should reconsider. – Don’t get me wrong. All of this is correct. But it’s also not enough anymore. It does not impress the Chinese. Therefore I hope that the new information revealed by the US and shared with partners, including in Berlin, will lead to an injection of a more resolute approach.
What options does the Chancellor have to exert pressure on the Chinese leadership?
Here’s the problem. Sticks need to be transatlantic and European in nature. If Americans don’t put companies like Hikvision and others on sanctions lists, those companies could still work within the European Union, including Germany. So you need a united approach: Name Chinese companies or sectors that are supporting the Russian military machine and tell Xi Jinping: We will limit their ability to do business in Europe or Germany. But Germany doesn’t have a sanctions program of its own, so it needs to be implemented by the European Union.
You sound pessimistic. On his previous visit to Beijing, Scholz managed to coax Xi Jinping to disapprove of Russia’s nuclear threats. Surely that was a success.
That was a success, no doubt. By that time, the US really considered the risk of Putin using nuclear weapons in the fall of 2022 very high. So they pursued various channels: brought material to Poland and Ukraine that would help the population if Russia chose to use nuclear weapons. They also talked to the Russians and threatened them with consequences. They advised the Ukrainians not to try to enter Crimea militarily. They talk to countries like India and China. And they also ask Europeans to have these conversations with Beijing. In this multifaceted effort, Scholz was one piece of the messaging. And yes, it has worked ultimately.
What can Scholz hope to achieve this time?
That’s difficult. I think that China is ever more reluctant to really change its course. The current trajectory of the war is working quite okay for China. Russia is having momentum on the battlefield, whereas President Zelensky’s maximalist formula – that Russia first withdraws from all occupied Ukrainian territory, including Crimea – simply does not reflect the realities on the battlefield.
If the current situation is acceptable for China, why is Beijing dispatching a peace ambassador like Li Hui?
Don’t be distracted by appearances. There is the officially stated mission, which is: We want to have negotiations. We want to find where the positions are and maybe bring them closer. In reality, this is more of an information-collection mission than a peace approach. Li Hui mainly wants to find out when might be the right time for China to step in more actively. Is it not the time yet, and it’s good to kind of hold back.
And the other part?
The other big part of Li Hui’s mission is influencing the global audience in the developing world, in the so-called global South. There, China says all the time: Look, China is the only country that has a special envoy for peace who travels to Moscow and Kyiv and to all the regional capitals. Who else is doing that – Europe? The US? Only China.
But Scholz has a good connection to China. Foreign Minister Annalena Baerbock and Economics Minister Robert Habeck are viewed much more critically in Beijing. Is this the strength of the good cop, bad cop or more of a weakness towards China?
It’s a weakness, in my view. It would be more beneficial to speak with one voice. Beijing will drive a wedge into these differences. And that’s true not only for Germany’s ruling coalition but also for the European Union. And sorry, but don’t blame China for that. That’s what diplomacy really is about.
Given the current events in the Middle East, another question is: Could China influence Iran’s actions?
We haven’t seen an active Chinese role in regional diplomacy since the October 7th terrorist attack, the ensuing war in Gaza, and broader regional escalation. I don’t share hyperventilation about Beijing’s ability to engage in regional diplomacy.
But China brokered an agreement between arch-enemies Iran and Saudi Arabia last year. At the time, some even believed China could replace the United States as a regional power.
But this is not supported by facts. In Beijing, the two found a player who, above all, provided the logistics for the talks. But even this agreement remains mainly on paper. China hasn’t dissuaded the Houthis from disrupting global trade, although PRC ships are now safe. The situation between Iran, Israel and others is very complicated, to say the least. China knows that and doesn’t want to be involved, let alone be in charge.
Alexander Gabuyev is director of the Carnegie Russia Eurasia Center, where he leads a renowned team of analysts who were formerly part of the Carnegie Moscow Center, which was forced to close by the Kremlin in early 2022. His research focuses on Russian foreign policy, the war in Ukraine and Sino-Russian relations.
Following his trip to China and a meeting with China’s Foreign Minister Wang Yi, the former head of the Munich Security Conference, Wolfgang Ischinger, sees a soft distance of China to Russia, which could play a role in the meeting between China’s President Xi Jinping and German Chancellor Olaf Scholz this Tuesday. “My impression is that China is willing to talk to the German colleagues not only about repeating the statement regarding the inadmissibility of Russian use of nuclear weapons, but could even sharpen this statement,” Ischinger told Table.Briefings.
Ischinger had a 30-minute meeting with Wang Yi in Beijing last week. China’s Foreign Minister has also been Director of the Central Foreign Affairs Commission of the Communist Party since 2023, making him China’s highest-ranking foreign policy official.
Therefore, Scholz’s visit to China is “also particularly important regarding the timing,” said Ischinger. While there is an official line in China as a “permanent partner of Russia,” there is also an unofficial line that longs for an end to the conflict as it has economic policy implications for relations with Western developed countries.
Ischinger believes that the relationship with Russia is not a partnership of equals anyway. “China is the boss.” There is a widespread narrative in China that Putin “has made a big mistake with the attack, with false objectives and unattainable goals,” Ischinger says, referring to his talks.
According to Ischinger, China is also particularly sensitive when it comes to nuclear issues because China remembers the military border conflict with Russia at the Ussuri in 1969, where Russia threatened China with a nuclear strike shortly before its defeat. “The older generation in Beijing know very well that Russia has also threatened them in the past.” broe
Federal Chancellor Olaf Scholz expressed his hope for greater scientific exchange with China. This exchange is needed, Scholz said on Monday at Tongji University in Shanghai. During the Covid pandemic, contacts had decreased significantly, which was not good. “But now it’s different again. In this respect, I hope that talks will increase again, as will reciprocal visits,” said Scholz on the second day of his three-day China visit. He pointed to the Chinese students in Germany and said it was good that the number of German students in China was rising again.
In recent years, research collaboration with China has been the subject of critical debate due to geopolitical tensions and security concerns. Scholz said he wanted to talk to the leadership in Beijing on Tuesday about international matters such as climate change, security and stability, as well as the growing integration of the world. rtr/rad
Since Russia’s war of aggression at the very latest, geopolitics has been among the highest priorities of CEOs and board members. According to a survey by Heydrick & Struggles, geopolitical and macroeconomic uncertainties are right at the top of the agendas at company headquarters. The big issues are China, the war in Ukraine, a further escalation in the Middle East and the risk of a second Trump presidency.
When considering the risks associated with China, there is a growing divide between parts of politics and business: While the EU Commission, the German Foreign Office and security authorities urge companies to “de-risk,” DAX CEOs traveling with the German Chancellor on his recent trip to China made it clear that they cannot do without China and that the country remains a key sales market and technology partner.
This divide becomes even wider when looking across the Atlantic: In the US, the tone towards China is becoming increasingly critical and even alarmist in all parties – which will likely intensify during the election campaign. Recent discussions in the White House and Congress have shown this and several publications confirm this. For example, the US House of Representatives published a report with the telling title “How American Venture Capital Fuels the PRC Military and Human Rights Abuses.” In the field of technology, a “decoupling” between the US and China is already in full swing, as evidenced by US export restrictions on semiconductors or stricter “outbound” investment controls on biotechnology or artificial intelligence.
While these measures could still be classified as “tech containment,” more and more influential voices are talking about a “new Cold War” (Niall Ferguson) against China, especially in light of the US government’s evidence of support for Russia with war-relevant goods such as tank parts, satellite images and rocket fuel.
This is one of the reasons why the Marathon Initiative, in whose ranks some Republican security politicians are “hibernating,” is calling for the US military to focus on directly deterring China. The renowned Center for Strategic & International Studies runs through suitable war scenarios. In the Trump camp, think tanks have developed programs for a Republican takeover – all with highly critical stances on China. According to the 920-page strategy paper “Project 2025” by the Heritage Foundation, the Center for Renewing America and the America First Policy Institute, this applies to both security policy and trade issues.
Why should German companies concern themselves with these debates? The relationship between the US – as the other strategic market for European industry – and China is the central axis of international politics in the 21st century and has a significant impact on global trade, energy and raw material security, supply chains, and capital markets. As such, it affects globally active companies’ long-term corporate strategies, business models, and investment planning.
They would be well advised to consider what a “Cold War 2.0” would mean for them. The starting point should be the realistic assumption that Germany’s dependence on the United States will remain high in the medium term (NATO, nuclear umbrella) and the assumption that the United States as a market will retain or expand its competitive advantage in terms of energy prices, financial strength and technology – even under Trump.
Should the conflict between the US and China intensify, Washington will demand that its allies take its side – and use leverage to do so. European companies would not be able to avoid this either – and would then be targeted more strongly by the Chinese side in return. For example, higher bureaucratic hurdles, politically motivated restrictions on business activities, tighter export controls, for instance, on critical raw materials, stricter capital market controls, or more difficult access to the South China Sea would be conceivable. Experts also warn of trade blockades against Taiwan, increased cyberattacks or (punitive) tax measures.
Hopefully, this will not happen and trade with China will remain as open as possible. However, in line with the Business Judgement Rule, management boards must plan for such scenarios. This is also an obligation towards shareholders, employees, and the public. Nobody wants a new Cold War. But being prepared for it is a must for good corporate management.
Jan F. Kallmorgen is partner for Strategy and Transaction Consulting at Ernst & Young. He advises companies and investors on geostrategic matters with his team.
Young Chinese have transformed a seemingly unremarkable park in Chengdu’s Yulin district into a mini Disneyland. Where previously it was mainly pensioners passing the time on gym equipment, young people in costumes of famous Disney characters now come together, film videos and listen to music. The hype originated from a dispute between two rappers from the popular casting show “The Rap of China.” In a song aimed at his opponent Xiedi, the eliminated rapper Nuomi declared “Xièdì, wǒ yào diss nǐ 谢帝,我要diss你”. According to the fans, the English verb “diss,” which in hip-hop slang means to slander the other person, sounded like the Chinese name for Disney: Díshìní 迪士尼. The accompanying music video, which was filmed in that park, went viral, inspiring this astonishing mix of the online and offline worlds.
