Germans keen to boost cooperation with China

Calls for stronger economic cooperation between Germany and China have come from the top rungs of government and business in Europe’s biggest economy.

Addressing a virtual conference of the World Economic Forum, or WEF, on Monday, Herbert Diess, chairman and CEO of carmaker Volkswagen, said China is moving in the right direction and that the Comprehensive Agreement on Investment, or CAI, between the European Union and China concluded at the end of 2020 is “a good move forward”.

Diess made the comments in a discussion aimed at promoting economic revival on the opening day of the Davos Agenda, a World Economic Forum event.

Peter Altmaier, the German minister of economic affairs and energy, echoed Diess’ views.

Asked by moderator Geoff Cutmore from the CNBC network whether it was a mistake to have concluded the investment before the inauguration of US President Joe Biden, Altmaier said: “No, it was not a mistake.”

He explained that what the EU and China signed is in large part an arrangement that the United States already has with China. “I am very optimistic that we can develop, negotiate and sign more similar agreements worldwide,” Altmaier said.

China and the EU announced on Dec 30 the conclusion of negotiations for the CAI after 35 rounds of talks in seven years.

It happened at a time when China replaced the US as the EU’s largest trade partner for the first time. The European bloc has been China’s top trade partner since 2004.

‘A step further’

At the Davos forum on Tuesday, German Chancellor Angela Merkel praised the investment treaty.

“During the Germany presidency (of the Council of the European Union in the second half of 2020), we have gone a step further with regard to the EU-China investment treaty that has been negotiated since 2013,” she told a talk moderated by Klaus Schwab, chairman and founder of the WEF.

Merkel said she was so satisfied with the progress “because it has injected a new quality in the relationship between the European Union and China, and because we can do more now”.

For Diess, he is excited that some of Volkswagen’s joint ventures in China are now majority owned by the company.

“For me, it is easier to invest in China than China is allowed to invest in Germany or some other places,” he said, adding that “they are depending on the West, we are depending on China”.

The 62-year-old German business leader hopes that the world will get back to a time when people benefited from each other’s development, instead of pursuing isolation and making things worse.

“China is a huge opportunity. China is also technologically advancing fast,” Diess said.

He said Volkswagen has strong assets and many development engineers in China, and its technology developed in China is also being used in Europe and the US.

Diess expressed the hope that the deglobalization and polarization seen over the past years was just “a transition period”, clearly referring to the protectionist and unilateral policies of the administration of former US president Donald Trump.

“We are hopefully heading back to a more open world with free trade,” Diess said. “I think it’s much better to try to cooperate and work with China than to try to isolate China.”