Merkel visit can shore up relations

By Chen Qingqing Source:Global Times Published: 2018/5/22 21:28:40

Close China-Germany ties set to counter US protectionism

Workers make bamboo products for export to Germany at a factory in Shangrao, East China's Jiangxi Province in July 2016. Photo: IC

China and Germany are expected to further strengthen their business relations, while issues concerning market access and intellectual property (IP) rights will also be addressed, German business representatives said on Tuesday, ahead of an official visit to China by German Chancellor Angela Merkel.

Merkel will visit China from Thursday to Friday at the invitation of Chinese Premier Li Keqiang, according to the Xinhua News Agency. It will be her first trip to China since being reelected as German Chancellor.

Merkel said that Germany wants to strengthen multilateralism with China while also addressing trade issues such as reciprocal market access and IP protection during her visit, Reuters reported during the weekend.

"I feel excited about this visit. Merkel has come to China almost every year, and each visit, more or less, has pushed bilateral trade forward," Wang Yingtao, manager of DMG Medical Devices (Beijing) Co, a subsidiary of DMG Chemisch-Pharmazeutische Fabrik GmbH, told the Global Times on Tuesday.

China was Germany's largest trading partner in 2017 for the second consecutive year, with a total trade volume of 186.8 billion euros ($219.7 billion), according to the German Federal Statistical Office.

As a major manufacturing and trade-focused country, Germany has a heavy dependence on global trade, noted Li Gang, an associate research fellow at the Institute of European Studies under the Chinese Academy of Social Sciences.

"Brexit and rising protectionism under the Trump administration have become a blow to multilateralism and globalization. As a result, [Merkel's] trip will be centered around trade issues," he said.

However, German business has seen a slowdown in the Chinese market in recent years, with some of German firms holding a cautious view about the investment environment. For instance, more than 50 percent of 423 German companies surveyed by the German Chamber of Commerce in China in 2017 expressed unwillingness to invest in new plants in China.

"The IP issue has become a shared concern among foreign investors in China, including those from Germany," Wang said.

IP is very important and it can get copied in China, Florian Simmendinger, CEO and founder of German hardware start-up Soundbrenner, told the Global Times. "Everybody knows that. So you need to have a strategy to protect yourself," he said.

In recent years, some foreign companies have also said that the business environment in China has not met their expectations, as they could not enjoy super-national treatment with preferential policies, Wang noted.

"German investors also need to adjust in accordance with the new policies that the Chinese government has made," he said.

Addressing issues

Merkel will also visit Shenzhen, South China's Guangdong Province this time. During her visit to China, she will address issues that German companies have been complaining about such as reciprocal market access, according to Reuters.

Germany has fears about the increase of Chinese investment and Chinese products in the European market. It also has concerns over China-led merger and acquisition deals, which could lead to an outflow of German high-end technologies, Li noted.

"Still, cooperation between China and Germany is the mainstream trend," he said, noting that concerns over the alleged theft of IP reflected Germany's anxiety over the rise of the Chinese high-tech industry.

"I think the [Merkel] visit is just to maintain good relationships and make sure the trade tension between the US and China does not affect Sino-German relations," Simmendinger said.

Posted in: ECONOMY

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