Source: Global Times
[Global Times special correspondent in Germany Aoki Wang Min] "When Doing business with China, European companies must recognize the insurmountable red line. Russ Ulm, president of the German Federal Confederation of Industry (BDI), which represents 40 industry associations in Germany, said in an interview with Desche News Agency on the 4th local time, "Whoever wants to continue to enjoy free market access (of the European Union) must abide by the basic rules and at the same time must open up their own market." He also called on other European countries to make this clear to China. BDI is one of the most important organizations in German industry, and Russ Ulm's statement has raised concerns about whether Germany will adjust its China policy on the economic front.
President of the BDI of the German Industrial Association Russ Ulm
Russ Ulm believes that the opening of the markets between Europe and China is not equal. According to German media, China is Germany's largest trading partner, and for many German companies, China has become one of the most important markets. But these companies are facing fierce competition in the Chinese market. At the same time, Chinese exporters in the EU market also pose a huge challenge to German companies. Moreover, China's economy has recovered from the epidemic significantly faster than Europe. While the EU largely allows Chinese companies free access to its markets, China is increasingly closing off its own markets. However, this is not the only problem, Ruth Ulm declared, "China has repeatedly violated global rules, especially when it comes to human rights." "Both political and business circles must be clear about their red lines." Russ Ulm threatened in the interview that a relatively broad consensus has been formed within the EU on relations with China, and the "Five Eyes" countries have also reached an agreement. "I am optimistic that an international coalition can be built to deal with Beijing in the right way."
According to BDI's official website, the organization represents the interests of 40 german industrial industry associations, more than 100,000 companies, and about 8 million employees. It is also the most important industrial lobbying organization in German industry. According to German media reports, BDI is one of the biggest driving forces of Germany and even the EU's economic policy towards China. The group's principles paper on China's strategy, released in early 2019, referred to China as an "institutional competitor." This was the first time the concept was proposed in the European Union, and the German government and the EUROPEAN Union subsequently described China as a "partner" and an "institutional competitor" at the same time. It is reported that drafts such as "the EU wants to exclude China from EU public procurement contracts" have also been supported by the organization.
For Russ Ulm's latest statement, some German netizens expressed disdain. Some netizens said that this shows that Germany is afraid of competition. If Germany's industrial giants could make themselves strong enough to lift meaningless sanctions against other countries, German industry would benefit even more. Some netizens said that this reflects the fear of Western countries that China is about to make the next leap. Many netizens criticized that Russ Ulm's so-called respect for human rights statement is hypocritical.
In fact, this is not the first time russ ulm has spoken of the so-called "red line" issue. Speaking at an industry event in June, he argued that Germany needed "frank discussions" about how to deal with trading partners such as China and that germany could not shy away from confrontation if the so-called "human rights red line" was crossed. Some German Chinese scholars believe that the German Federal Confederation of Industry was more pragmatic toward China before and has become more radical in the past two or three years. This may be related to the increasing competition of "Made in Germany" in the face of "Made in China". Even in the machinery manufacturing industry, Germany's throne as the world's largest exporter of machinery manufacturing was "snatched away" by China last year. Even in Germany's most important automotive industry, Chinese companies are beginning to challenge Mercedes-Benz, BMW and Volkswagen.
On the 26th of this month, Germany will hold a general election. Some German media speculate that the new government is likely to make major adjustments to china policies that emphasize economic cooperation over the past decade or so. At present, the main political parties' election platforms highlight China policies, including geostrategic challenges, market access conditions, and human rights conditions. The German Center for Chinese Studies in Mercator pointed out in a report that at least from the perspective of the election platforms of the political parties, a change in China policy can be expected after the election. "The current German China policy is bilaterally oriented, especially in terms of economic interests. A stronger European orientation in the future will contrast with existing strategies. In the discussions about 5G, all parties have at least implicitly expressed support for a European solution and warned of reliance on foreign digital technologies. If the LDP and Greens join the future federal government, they may take a tougher stance on China. Quoted in an August poll, 58 percent of Germans believe that even if economic and trade relations with China are affected, Germany should adopt a tougher China policy and pay more attention to defending Germany's own interests.
However, some pragmatic German politicians have also advocated greater cooperation with China. The analysis believes that for German companies, drawing red lines does not bring progress. According to BDI data, German exports to China account for about 8% of Germany's total exports in 2020. From 2016 to 2020, China became Germany's largest trading partner for five consecutive years. For the German automotive industry in particular, orders from China have significantly mitigated the crisis caused by the COVID-19 pandemic. At present, the German electorate is more glued, so the future German government is likely to have a multi-party coalition governance situation, considering economic interests and many global issues, so Germany's China policy may also show a more complex state.