Archive for July 16th, 2010

Friday, July 16, 2010

Cadres: We want to be Loved by You

Germany and China signed ten agreements on trade and relations during German chancellor Angela Merkel‘s visit to China, reports Bloomberg. If materialized, they would amount to 4.4 bn US dollars. In what Der Spiegel describes as a harmonious meeting between Merkel and Chinese chief state councillor Wen Jiabao, the political leaders discussed business, international initiatives such as joint action against climate change, and the openness of markets. It’s Merkel’s fourth visit to China as chancellor of Germany. According to AFP / the Sydney Morning Herald, Merkel prodded China to ease access to its markets.

“Chinese companies, like those of many other countries, enjoy very good access to the German market. We hope that German enterprises can enjoy the same access to the Chinese market,” she said.

On June 29, the European Union Chamber of Commerce in China (EUCCC) published a business survey which, depending on interpretation, suggests that survey respondents are generally optimistic about growth in their respective business sectors in China, or that Chinese rules are unpredictable.

On Friday morning, during one-and-a-half hours of talks at the Great Hall of the People’s Fujian Hall, on a light note, Wen told Merkel that the German national soccer team’s performance had widened Germany’s influence in China, as it had been full of vitality and vigor. And during the following Sino-German Dialog Forum (中德对话论坛), the head of the Chinese side of the forum, CPPCC vice chairman Xu Kuangdi (徐匡迪) quoted latest surveys saying that every second German held a positive view of China, while 90 per cent of the Chinese public viewed Germany positively, which, he suggested, could have something to do with the world cup.

The Chinese leadership pushes for EU recognition of China as a market economy, writes Der Spiegel. It’s not a matter of face, but of leverage in international negotiations, and a status that would make it difficult to accuse China of trade manipulations. The Asia Times explained more than five years ago what is involved:

[…] Having full market economy status (MES) is a valuable legal and trade appellation with implications for the issue of dumping, a major issue in the West.
Eventually MES will give Beijing extra leverage in negotiations when Chinese companies are accused of dumping their products at an unfairly low price on a foreign market.
Being a real market economy means, among other things, that the production costs of all goods and services are subject to the demands of market forces, without state interventions such as subsidies or price controls. This is important when a country is accused of exporting products at a price below their real production costs – or dumping, thereby shutting out those who “play by the rules”.

Meeting criteria isn’t the only factor. By the time the Asia Times published the article, three small countries – Malaysia, New Zealand, and Singapore – had recognized China as a full market economy. The big prizes, however, are the United States and the European Union. The Asia Times also provides an overview of how the market economy status of a country is evaluated.

China didn’t yet meet all requirements for such recognition, Merkel explained after her meeting with Wen, and added that intellectual property issues needed to be clarified.

While Xu Kuangdi only cited surveys concerning China’s image in Germany and vice versa, Yu Xiang, research fellow with European studies of China Institute of Contemporary International Relations, suggests that while “Germany’s objective and impartial stance on the issue of China’s renminbi exchange rate and the Taiwan question has created a positive political atmosphere between the two nations, “the German media, as well as some in the political and economic spheres, have expressed irrational antipathy toward the Asian nation“. “Some German media outlets have even lashed out at the Chinese government, doubting its legitimacy and governance ability.

In discussions with cadres at the Communist Party’s Central Academy (中共中央党校) on Friday afternoon, Merkel was asked why the EU arms embargo was still in place. Merkel replied that the embargo wasn’t there  because of suspicions that Beijing might have “aggressive intentions”, but because of the state China was in domestically. People in Europe were “highly sensitive” about human rights in China. According to the same report by Der Spiegel, Wen Jiabao advised the friends at the media to provide more coverage about the bright sides of Sino-German relations.

Also on Friday afternoon, Merkel had a meeting with Chinese party and state chairman Hu Jintao.

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Related
“Euro Investment Continues”, BBC News, July 16, 2010
Shanghai Expo: Waiting Messages, May 18, 2010

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