Hamburg, Germany – On a sunny afternoon in the port of Hamburg, gigantic Chinese-built cranes load and unload cargo from the hold of the CSCL Mars, a container ship measuring more than three football fields and owned by the Chinese company Cosco Shipping.
It is not an unusual sight.
Hamburg’s strong rail links with the European hinterland have made it a key link between the land and sea branches of the ever-expanding Belt and Road Initiative (BRI).
China accounts for around a third of Hamburg’s freight throughput, and the German city is home to Cosco’s European headquarters.
The state-backed company now wants to buy a minority stake in one of the port’s terminals – which would mark the first time that a share of ownership has been held outside the former Hanseatic city-state.
“Wherever Chinese companies are shareholders, they are increasingly trying to orient their supply chain,” port marketing CEO Axel Mattern told Al Jazeera, examining Mars’ vast steel hull since then. the bridge of a neighboring skiff.
“There must be some Chinese interest involved, however small. If not, we run the risk that in the long term the cargo will be rerouted, ”he added.
The goods traveling from Hamburg to Shenzhen and Ningbo tell the story of close German-Chinese economic relations.
Cars, chemicals and precision machinery are shipped. Return of cell phones, computers, appliances and clothing.
Hamburg’s export and import balance is currently equal, but concerns have grown about the imbalance in Sino-German relations as a whole.
The increasingly confrontational pose of the United States, criticism of China’s human rights record and meddling in Hong Kong, and fears of unequal competition between its powerful manufacturing sector are pushing forward on Germany so that it can embark on a new path.
“Change through trade”
In the years leading up to Angela Merkel’s ascension to the German Chancellery in 2005, China joined the World Trade Organization (WTO) and signed a partnership agreement with the European Union that envisioned its “transition success towards a stable, prosperous and open country that fully embraces democracy, free market principles and the rule of law ”.
German companies, many of which moved to China in the 1970s, have benefited enormously from its rise as an economic superpower.
Since 2015, China has been Germany’s largest trading partner.
The pair traded $ 258 billion worth of goods in 2020, a 3% increase despite the COVID-19 pandemic.
“Merkel and China kind of grew up together,” said Theresa Fallon, director of the Center for Russia Europe Asia Studies. “It was a very different world.”
Now, as Merkel prepares to leave politics, this “wandel durch handel” or “change through trade” strategy finds few remaining supporters.
Under President Xi Jinping, the Chinese economy remains under strict state control, its foreign policy has become more assertive, and allegations of human rights violations against Uyghurs in Xinjiang and political dissidents have reportedly escalated.
Germany is also at odds with the United States, where President Joe Biden has maintained Donald Trump’s uncompromising stance with Beijing on trade, human rights, the South China Sea and other human rights issues. division.
“Unbalanced Chinese policy”
Reinhard Bütikofer, a Green Party MEP and one of the fiercest German critics of China, told Al Jazeera: “Germany’s unbalanced Chinese policy [is] heavily biased in favor of the interests of a few multinational corporations to the detriment of other sectors of our economy, and certainly to the detriment of our values and security concerns.
Earlier this year, China’s Foreign Ministry imposed sanctions on Bütikofer – and other European officials critical of Beijing.
The diplomatic fury that followed put a long-awaited EU trade deal with China on ice. The deal had been a priority for the German Presidency of the Council of the EU in 2020.
Officials from some countries, including Spain, Poland and Italy, have complained that their concerns have been put aside as Germany try to push him past the finish line.
“It seems that it is clearly unclear how much anger there is in other EU member states at the way China promotes German interests,” Fallon told Al Jazeera.
The German auto sector, which wields enormous political influence, remains optimistic about China, on which it has become heavily dependent for its sales.
It is the biggest market for BMW, Audi and Mercedes.
However, Germany’s small specialist manufacturers, who form the backbone of its productive economy, are increasingly concerned that key technologies will fall into the hands of Chinese rivals and be used to compete with them.
Germany introduced new laws to protect sensitive industries in 2017, after the takeover of robotics company Kuka by Chinese group Midea.
Since then, dozens of potential deals have been scrutinized and a number of takeovers by Chinese state-funded companies have been blocked, including Leifeld Metal Spinning in 2018 and satellite maker IMST in 2020.
In 2019, the Federation of German Industries released a stark report describing China as a ‘systemic competitor’ and calling for EU legislation to tackle China’s state-subsidized industries and protect European tech companies. .
Rules have also been introduced to make it harder for Huawei to operate 5G mobile networks, but Merkel has pushed back calls for an outright ban on intelligence agencies and personalities from her own party, who fear it will make critical infrastructure vulnerable to the influence of the Chinese Communist Party.
Germany’s parliament passed a law in June that will require German companies, as well as their foreign affiliates, to ensure their supply chains are free from environmental abuse or forced labor.
The legislation, which comes into effect in 2023, could affect German companies like Volkswagen, which operates in Xinjiang, and provoke retaliation from Beijing.
Public opinion is changing
Speaking at the World Economic Forum in Davos in January, Merkel said she hoped to avoid the bifurcation of world politics into pro-US and pro-China camps.
“I would very much like to avoid the construction of blocks,” she said.
Yet public opinion in Germany has regularly turned against China.
A poll released by Forsa in August found that 58% of those polled wanted the government to take a tougher line against Beijing and stand up for its own interests.
Nils Schmid, foreign affairs spokesman for the Social Democratic Party, which dominates the polls, said the status quo with China will have to change.
The Green Party, which is likely to be part of the next coalition government, has been particularly aggressive towards China. He demanded tariffs on state-subsidized imports and protection of digital and physical infrastructure from Chinese influence.
“After the elections, we will move towards a more European approach,” said Bütikofer. “A more critical approach, in line with German public opinion and the attitude displayed by the major professional associations.
Merkel’s successor, Armin Laschet, nevertheless continued his conciliatory approach.
In a television interview on Monday, the Christian Democrat leader praised China’s development of Duisberg as a rail hub for the BRI, defended continued trade relations and warned of a new Cold War.
“Traditionally, Germans care deeply about [human rights], so I think it’s very hard now to be a politician and pretend everything will stay the same, ”Fallon said.
“The million dollar question is how are they going to do this? And will they have the will to do it? Because it’s going to cost people; It will hurt.
Cosco deal expected to be concluded
In Hamburg, the competition authorities should confirm the purchase of Cosco in the coming months.
The deal is backed by the Hamburg SDP and the Green government over fears by local opposition parties that it will create dependency on China, and the Ver.di union that working conditions may deteriorate. deteriorate.
“What makes sense for business must also be possible and done in practice,” SDP Mayor Peter Tschentscher said in July, saying the investment would be mutually beneficial and necessary to keep the port competitive.
Cosco is currently the third largest shipping company in the world in terms of fleet capacity, and Mattern, the port’s marketing CEO, is confident it will clinch the top spot in the years to come as the Chinese economy continues to grow. grow.
There is no illusion that Germany can make China a model of itself, but separating business from politics has had its advantages.
“It’s a very Hanseatic way of handling these things… Better to be on the same level and be confident than to be enemies.”