China, Germany are key promoters of globalization

By Wan Zhe Source:Global Times Published: 2017/7/6 21:38:39

Illustration: Luo Xuan/GT

The G20 Summit in Hamburg is the most important multilateral diplomacy event that Chinese President Xi Jinping has participated in after the Belt and Road Forum for International Cooperation in Beijing, and it is also an important stage for Germany, as a defender of globalization, to promote the achievements of globalization. China and Germany both uphold the principle of openness, which has not only made them the beneficiaries of globalization, but also boosted their role as promoters and defenders of globalization. US President Donald Trump has been implementing the "America first" strategy and has shown an attitude of skepticism toward globalization. As two important global trade and investment powers, China and Germany have a lot of room for cooperation on global governance.

There has been some trade friction between China and Germany in the past. In recent years, with China's "going global" strategy being promoted, China's investment in Europe has accelerated, causing concerns in some German economic circles and hesitation about mergers and acquisitions involved in the Belt and Road (B&R) initiative. However, the two countries have more common interests in globalization and the B&R initiative.

In 2016, China rapidly increased its investment in Europe. The investment in the 28 member countries of the EU reached 35 billion euros ($40 billion), up 77 percent year-on-year. In 2016, China invested 11 billion euros in Germany, and this number surpassed Germany's investment in China for the first time. As the major power in the EU, Germany has always been committed to accelerating the process of European integration and trade liberalization, and has also made efforts to recognize the market economy status of China. Germany should objectively recognize China's investment in Europe, continue to insist on the principle of opening up to foreign investment and push for further development of the Sino-German economic relationship. As for China, the government will welcome foreign investment in areas including high-end manufacturing, such as autos, and will continue to relax restrictions and expand the openness of its market.

China's promotion of infrastructure construction in Central and Eastern European countries is intended to make the global economy work more smoothly. The experience China has gained in infrastructure construction and the advantages it has in terms of financing, combined with Germany's technological advantages will make the bilateral cooperation between the two countries complementary, instead of a zero-sum game. In 2016, there were a total of 1,702 west-bound China Railway Express train journeys that were made up of rail cargo links between China and Europe and other regions, and 1,034 of them ran between China and Germany. Duisburg has become an important hub for the B&R. In addition, both China and Germany have significant B&R-related investment interests in Afghanistan, and their cooperation in mining and disaster prevention is going well. In the future, there may be further cooperation in economic and security terms. The two countries will work together to maintain a peaceful environment for global development.

At the upcoming G20 summit in Hamburg, Germany, talks on Africa will be a key part of the agenda. The German government has said it wants the G20 to strengthen its role as a responsible part of the international community. Berlin's cooperation with Africa, led by the Federal Ministry for Economic Cooperation and Development, is mainly made up of official development assistance (ODA) to the continent. China has become a friend of Africa over the years and has invested far more in the continent than Germany. Therefore, when carrying out third-party market cooperation in Africa, Germany can contribute advanced environmental protection technology and machinery, while China can offer funding and experience. This will realize poverty alleviation in Africa in a more precise and economic way.

China and Germany are two of the world's major economic powers and their differences are nothing to be afraid of. A closed-door policy would not be a way out, and promotion of globalization should be a common goal for both sides in global governance.

The author is chief economist with the International Cooperation Center of the National Development and Reform Commission.

Posted in: INSIDER'S EYE

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