SOURCE / ECONOMY
Dialogue between China, Germany to set up examples for other European countries: expert
Published: Jun 21, 2024 01:44 AM
Photo:CFP

Photo: VCG


The reported visit by German Vice Chancellor and Economy Minister Robert Habeck this week to China highlights the importance of addressing disputes through dialogue, and sets an example for other European countries, a Chinese trade expert said on Thursday.

Germany, as a pivotal leader of the EU, should play a more proactive role in preventing trade friction escalation while working in a mediator role to defuse tensions by efforts such as persuading the European Commission (EC) to resolve the dispute with China through dialogue, according to the Chinese expert.

Habeck will embark on a working visit to China this week, with plans to discuss topics including trade, climate protection, and energy policy with Chinese government officials, according to media reports.

The visit came amidst rising trade tensions between the two vital trading partners, with the EC announcing a decision last week to impose an additional provisional duty of between 17.4 percent to 38.1 percent on electric vehicles (EVs) from China from the beginning of July.

Before departing Germany, Habeck told media on Wednesday that relations with China had become more complex but that the country was an important partner in all fields.

A low-key business delegation will accompany Habeck to visit China, largely formed by German small and medium-sized enterprises (SMEs), to "give the backbone of Germany economy more recognition abroad," according to German economic ministry.

As such, Germany companies have expressed hope on a mediator role that Habeck can perform during this trip to prevent unwanted impacts from the ongoing trade dispute.

"Habeck should act as a mediator between the EU and China here and resolve a trade dispute early in the interests of German SMEs," Reuters reported on Wednesday, citing Patrick Schoenowski from the German Association for SMEs.

Although the German Economy Ministry said Habeck will not be involved in the tariff negotiations directly, Chinese experts said that while Habeck's trip to China will focus on a number of issues, such as exploring the vast potential over green cooperation between China and Germany, the minister's trip will undoubtedly involve exchanges on the EC's tariffs.

The EC decision has drawn strong opposition from the German government officials, German auto behemoths and the German business community in general.

In a closed-door meeting on Tuesday, China's auto industry called on the government to adopt firm countermeasures and suggested that consideration be given to raising the provisional tariff rate on imported gasoline cars with large-displacement engines, the Global Times reported.

Over 80 percent of such cars are imported from the EU, according to an essay published on the WeChat account of China's National Development and Reform Commission (NDRC).

Gong Jiong, a professor at the University of International Business and Economics, expects that one of the key tasks of Habeck's trip would be to mitigate the spillover effect on German companies from the current escalation of tensions between China and the EU provoked by the EC's protectionist tariffs and "that goal has a high likelihood to be achieved."

In the context of rising trade tensions between China and Europe, "it is important to maintain dialogue," Gong told the Global Times. "Habeck could indeed serve as a mediator, which is conducive to resolving China-EU economic and trade disputes and this way of engaging in dialogue to address issues serves as a good example for other EU countries."

It is expected that Germany will play a certain role in the EU and exert some pressure on the EC, such as pressuring the body to make a compromise, Gong said, adding that he is optimistic that Habeck's trip will have some positive results.

The EC's tariff decision has drawn stern criticism from the German business community in China, with the German Chamber of Commerce (GCC) saying that such tariffs could impact the global automotive industry and calling for negotiations.

A recent flash survey by the GCC stated that for German companies doing business in China, optimism in the Chinese economy is slowly returning, as 38 percent of surveyed companies expect an improvement in the coming six months.

A total of 53 percent of respondents plan to increase their investment in China over the coming two years, per the survey.