For The First Time in History, Germany Fears Success

When Germany first became a modern united nation in 1871, its rise as the leading industrial power took many by surprise. Germany was able to industrialise more rapidly than Belgium, The Netherlands, France, Britain and the United States – the other great industrial powers of the late 19th century.

It was this spirit of innovation in industry and science that allowed Germany to rapidly recover from the Second World War and embrace a new mentality in geopolitics in the mid 20th century. This attitude is also what allowed the relatively smooth re-unification of the two German states after 1989.

Of course, since the end of the 19th century, other nations have industrialised even more rapidly than Germany did. Japan’s industrial revolution was a rapid process as was Korea’s, while the fastest industrial revolution in history was China’s. A country whose economy was largely agrarian as recently as the early 80s is now the leading industrial producer in the world, while China’s shift from a production powerhouse to a hybrid model of production plus innovation means that the 21st century’s most important inventions will likely be created in China.

 

 

For Germany which remains the most prominent industrial producer in Europe and which continues to excel in areas such as car production vis-a-vis the much larger United States, China is a natural partner. At a time when China continues to both produce and innovate at record pace and when German industrial products continue to be known for their high quality, a more open trading relationship between the two countries could help to develop initiatives wherein both great innovators and producers would cooperate to the win-win benefit of both nations.

It was this spirit of openness in trade which necessarily lead to collective innovations on the win-win model that Chinese Premier Li Keqiang has been discussing with the German leadership. China’s official Xinhua news agency reports on the aims of Premier Li’s visit in the following way:

 

 

“The Chinese premier called on the two countries to increase two-way investment and offer a fair, transparent and predictable investment environment for each other’s enterprises.

He said there are great possibilities for German companies to expand their exports of competitive goods, high-end equipment and high quality services to the Chinese market.

Noting that China-Germany cooperation has seen comprehensive, stable and healthy development, Li said the two countries need to actively promote innovation cooperation and further synergize their development strategies in innovation.

Last year, Chinese President Xi Jinping paid a successful visit to Germany, mapping out the future of the two countries’ relations with German leaders, Li said.

China-Germany cooperation is a fine example of cooperation between major countries as well as the South and the North, Li said. Such a partnership has guided the China-Europe ties for a long time and injected vitality to the growths of both countries and the world at large, he added.

Li said industries like electric vehicle and intelligent manufacturing should be taken as a cooperation platform, calling on the two countries to step up cooperation in emerging industries including artificial intelligence, new-energy driven cars and autopilot.

Li also expressed China’s willingness to cooperate with Germany in expanding third party markets and exploring opportunities in such fields as inter-connectivity, industrial construction, equipment manufacturing and public transportation prior in several regions like the Central and Eastern Europe (CEE), the Latin America and Africa.

When it comes to trade and investment, the premier said without free and open trading and investment environment, the economic and technological cooperation between China and Germany will come to a standstill.

China and Germany reaffirmed the stance that the two economies will jointly safeguard free trade and firmly oppose unilateralism and protectionism, and defend the rule-based multilateral trading system, he said.

In addition, China will stay committed to continuously expanding opening up so as to better cope with unilateralism and protectionism, Li added.

Given the current circumstance of globalization, starting a trade dispute not only harms the benefits of both sides, but is detrimental to the interests of all parties involved in the global industrial chain, Li said, stressing that there wouldn’t be any winner in a trade dispute.

The current good momentum of China’s development is the result of the continual optimization of economic structure as well as the rising internal driving force of growth, he said, noting China will do it better to maintain a more stable and sustainable growth.

China is confident in and capable of handling any risks and challenges, Li said, adding that his country will diversify its market with fair, open and transparent competition”.

 

 

While German Chancellor Angela Merkel embraced Premier Li’s stance on the importance of free and open trade in an age where international connectivity is increasing regularly, Merkel remained hesitant to overtly propose or endorse a freeing of trade relations between the European Union and China. While Merkel’s positive rhetoric towards China was welcomed, when not combined with concrete steps from European leaders to embrace the win-win mentality of Chinese openness, these words will ultimately fail to serve the European people and will ultimately represent a missed opportunity.

At a time when Chinese consumers remain hungry for the luxury goods Europe is known for while Europe seeks alternatives to US goods due to the imposition of Donald Trump’s tariffs on EU imports, something approximating a free trading relationship between China and the European Union could represent a great leap into a new and more positive era for both sides.

With Germany remaining the most influential member of the European Union it is largely on the shoulders of the German leadership to embrace the potential of a China-EU free trading agreement that could fundamentally alter the very nature of global trade and also perhaps convince the United States that protectionism is out of step with the needs and aspirations of some of the world’s most important economies.

Germany used to be respected for taking chances with innovation both at home and with its economic relationships abroad. Now though, it seems as though Germany has become overly cautious in rejecting new trading models even though the clear opportunity for mutually beneficial new relations beckons. While important deals were signed between Beijing and Berlin, ultimately without changing Europe’s course on the unambiguous path – the kind of full free trade deal between China and the EU that would breathe new life into the EU’s economy – these deals represent only a faction of the potential that clearly exists.

 

 

If Germany continues down this road, it may find that its economic position in the world will decline irreversibly in the face of not only China but other rising Asian powers who are not afraid to innovate – not only in terms of the products they create but in terms of the trading relationships they consecrate.

The choice for Merkel therefore should be an easy one. Unfortunately, her cold feet on the matter continue to drag her nation’s potential and Europe’s potential into a one way street where only more tariffs from the US await.

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