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Germany's Pivot to China

Angela Merkel

By Elizabeth Pond

Six decades after post-Hitler Germany outsourced its foreign policy to its Western allies, Berlin is again a diplomatic powerhouse. This week Chinese leaders and Syrian rebels alike are attesting to Berlin's clout.

In Beijing, officials are once again treating Angela Merkel as the real head of Europe on the sixth gala visit—the second this year—by the German Chancellor. And disparate elements of the Syrian opposition have just chosen Berlin, in tandem with Washington D.C., as the key venues for presenting their belated first coherent program for "the day after" strongman Bashar al-Assad is toppled.

Berlin's newfound international influence should not be equated with the unwelcome "renationalization" and self-interest that various American and European pundits accused Merkel of two years ago when she balked initially at bailing Greece out of its, and the euro zone's, financial crisis. At that point the commentariat tended to scold Germany for abandoning its 60 years of post-Nazi penance, exemplified by its ceding of military leadership to the United States and European political leadership to France.

Now that the Cold War has ended and the two Germanys are united, fears ran that a mightier Berlin no longer felt the need to play the model European. Instead, it was flexing its muscles in renewed self-assertion, without even hiding national interest under the cloak of European integration.

To be sure, there are some faint echoes of this indictment today as Merkel leads her high-octane delegation of seven ministers and 20 top business executives into a China that invests €1.2 billion in Germany (out of €10 billion in Europe as a whole), receives €26 billion investment from Germany, and gave Berlin a positive balance in total bilateral trade of close to €150 billion last year.

Thus, some European Union allies contend, Merkel's meetings with both President Hu Jintao and Prime Minister Wen Jiabao and the quasi-joint Cabinet meeting with 13 senior Chinese ministers have the aura of an exclusive special relationship and upstage the forthcoming EU-Chinese summit.

Others, like artist Ai Weiwei, China's most prominent dissident—along with a Bundestag delegation that recently canceled its own planned visit to Beijing over China's treatment of dissidents—fault Merkel for subordinating human-rights issues to commercial deals.

Still others worry that Germany—which accounts for half of all EU exports to China, consumes a quarter of Chinese exports to Europe, and saw its exports to China boost its own growth by half a percent to reach 3 percent last year—may be getting too dependent on still-authoritarian China. This narrative was perhaps reinforced by the announcement in Beijing on Merkel's first day in town of €4.8 billion worth of contracts for Airbus, EADS, Volkswagen, Eurocopter, and other German export champions.

Yet these residual misgivings, voiced by Germans as well as European and American allies, now reflect normal jostling over the balance in legitimate policies rather than the broad former aspersions on German motivations. Now that Merkel has persuaded her taxpayers to foot almost a third of the cost of two expensive bailouts of Greece and other efforts to save the euro, the angst that resurgent Berlin might be trying to shape a German Europe rather than a European Germany has faded. 

On the contrary, today there is a widespread hope that Merkel can be a trailblazer for Europe in China, especially since EU members have never been able to agree on a common strategic concept for relations with the world's rising great power and second-largest economy. In the near term, Europeans would like Merkel to persuade Beijing to join in the euro rescue by buying Spanish and Italian bonds. (No success on that score so far.)  

More broadly, all of Europe expects to benefit from a surge in Chinese investment as Beijing seeks to break out of the middle-income development trap it now faces and expands new foreign investment beyond securing natural resources around the world. China is only now beginning to invest its large capital stock in advanced Western economies in ways that will help move it up the economic chain. Here Germany is no maverick, but could well use its Chinese contacts to help establish mutual guidelines for European interaction with China's mixed state and private firms. The Rhodium Group calls Chinese investment in Europe so far "trivial compared to the aggregate" U.S. and intra-European investment there. However, it anticipates total new Chinese foreign direct investment of a non-trivial $1-2 trillion in the decade up to 2020, with some $250-500 billion of this going to Europe in mergers and acquisitions and greenfield investment.

So far, so obvious. What is more striking in the cordial German-China relationship is its growing political aspect. Merkel is said to be able to speak frankly about sensitive issues with her interloculars. This time the frank talk consisted of urging Beijing to break with Russia and stop blocking United Nations Security Council action to halt the Syrian government's massacres of civilians. (No visible success on that score either.)

German commentators can't resist contrasting this subtle maturing in Berlin-Beijing relations with Germans' increasing disillusionment with Vladimir Putin's stagnant Russia. For a decade or so, with businessmen driving the trend, Germans hoped that post-Soviet Russia would see a need to modernize the country and decide, like China, that to do so they must cooperate with the West in investment, ideas, and managing conflict. They largely gave up that hope when Putin resumed the presidency and showed no desire to soften his Hobbesian view of relations with neighbors.

The down-to-earth Angela Merkel certainly doesn't call her relative neglect of Moscow and her warm reception in Beijing this week anything out of the ordinary. But as a welcome partner of the outgoing and presumably also of the incoming Chinese party chiefs, she might just be leading Europe's own pivot to Asia.

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Elizabeth Pond is a Berlin-based journalist and the author of Beyond the Wall: Germany's Road to Unification.

[Photo courtesy of DanielW]

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