Germany and China promise closer co-operation amid growing background tensions

German chancellor Olaf Scholz has urged China to use its influence over Russia to end the war in Ukraine, amid growing ambivalence in Germany over the correct approach towards Beijing.

Mr Scholz said that, as a permanent member of the United Nations Security Council alongside Russia, Beijing carries a “very special duty” to urge Moscow to end the conflict.

“I appealed again to the Chinese government to exert its influence even more strongly on Russia in this war,” Mr Scholz said after talks with Chinese prime minister Li Qiang in Berlin. “It is important that China continues not to deliver weapons to the aggressor, Russia.”

In public remarks during Chinese-German government consultations in Berlin on Tuesday, the Chinese prime minister did not comment on Ukraine in his statement – nor did the two leaders take questions.

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Instead Mr Li, in office since March and considered a close confidante of president Xi Jinping, hoped the countries could “continue our co-operation in science and business ... to make a contribution to the stability of the world economy”.

The two leaders’ public efforts at harmony came after a new German security document last week described China as a “partner, competitor and systemic rival”. Beijing responded that such language would “push our world towards a vortex of division and confrontation”.

With a full strategy paper on China due in Berlin soon, Germany’s domestic intelligence on Tuesday described Chinese state espionage as “the biggest threat” to Germany’s economy and foreign direct investment.

Hours before, the Chinese state-owned shipping firm Cosco completed its purchase of a 24.99 per cent holding in a Hamburg port terminal. The deal has divided German public opinion – and Berlin’s coalition – but Mr Scholz, a former mayor of Hamburg, pushed the deal through cabinet.

On Tuesday the chancellor insisted Germany was interested in closer co-operation with China, in particular on climate challenges, but not at the expense of trade ties with other Asian countries.

“The more we know about each other, and the more open the chance, the lower the chance for misunderstandings,” Mr Scholz said. “We have no interest in an economic decoupling from China but the access to markets and fair competition ... remain challenges where we are pushing for concrete improvements.”

[ New Chinese premier Li Qiang emerging as more than a yes-man to president Xi ]

While Germany has an €85 billion trade surplus with China, the latter’s tough pandemic response has seen a fall-off in German business engagement. Recent months have increased fears of German dependency on China, in particular of repeating mistakes made with Russia before its invasion of Ukraine.

In advance of Tuesday’s government consultations, a leading German economic think tank warned that, what Russia was for energy supplies, China is for raw materials needed by German companies, particularly in the electronics sector.

“To ensure security of supply in relation to critical raw materials, Germany urgently needs a strategy for more diversification,” warned the IfW Kiel. Its paper flags 221 products – from laptops to medication – where China is the dominant supplier to Germany, the majority cases with a market share of at least 80 per cent.

While Germany’s federal government is determined to “de-risk and diversify” its industrial footprint with China, it remains divided over the correct approach. As the Scholz chancellery favours continue the pragmatic, pro-business path of the Merkel years, the Green-led foreign and economics ministries are more critical of human rights and environmental questions.

In advance of the Chinese delegation’s visit to Paris on Wednesday, the European Commission presented a 14-page proposed methodology on Tuesday for member states to carry out risk assessments of their economies.

[ New German security strategy to boost domestic defence and co-ordination national interests abroad ]

Commission president Ursula von der Leyen said “cutting-edge sectors” such as quantum computing and artificial intelligence require an additional level of protection.

Without mentioning China by name, she Ms von der Leyen said: “We want to make sure that they do not enhance the military capacities of some countries of concern.”