Full text of South China Morning Post's interview with German ambassador to China, Michael Clauss
Q: What do you think about China and Russia forming a close partnership to counter balance western influence?
A: Some observers have portrayed the Sino-Russian gas deal as a new alliance between China and Russia directed against the west. I don’t share this analysis. China and Russia do have common interests, but they also have diverging views on many other issues. For one thing China has not recognized the annexation of the Crimea peninsula by Russia. Secondly, you may also consider the Chinese vote on the UN resolution criticizing Russia. I think it came as a surprise to the Russians that China abstained and did not side with them. My reading is that there is a certain form of partnership between China and Russia. But this partnership is not an alliance directed against the west.
China has no interest in alienating the west. China needs the USA and Europe for its internal development, for reforms and for the exports markets. The United States and Europe are by far the biggest export markets for China. Between China and the EU alone the total trade volume accounted for more than 420 billion Euros last year.
Q: The fear that China and Russia are forming some kind of alliance is exaggerated?
A: Yes, that's what I would call it, exaggerated. There is definitely common ground between China and Russia. But there are also common interests China shares with western countries, especially with Germany. We have discussed the situation in Ukraine in depth with our Chinese friends. And we share the view that we want to see de-escalation. One thing we both want to avoid is a new cold war.
Q: Do you think the signing of the natural gas deal is a sign of unity between China and Russia? Russia is telling the world that it can as well make deals with China even though western nations are sanctioning Moscow.
A: The gas deal has been discussed for many years. I have closely followed the internal discussion in Russia. My impression is that many people in Russia had hoped the Chinese would be more forthcoming in the negotiations. In the end Russia had to make many concessions in order to reach an agreement on the price.
Q: How is the gas deal perceived in European or western countries?
A: As I have mentioned earlier, the negotiations about the gas deal have taken a long time. So the deal itself is not surprising. Secondly, there is an oversupply of gas on the market at the moment. That is why the gas deal will not have any effect on western countries and their supply of gas. Thirdly, the pipeline will take years to build. A lot of time will pass for the first gas to flow to China. Therefore I would not attach too much importance to it now.
Furthermore: The European Union and the US will remain the most important export markets for Russia by far. Russia cannot afford to lose these markets. The Russian economy still depends largely on natural resources, on oil and gas, but not on industrial products. That’s why Russia needs Europe and its demand in oil and gas.
Q: Have the Chinese done a favour to Russia?
A: I would not see China’s signature as a concession to Russia. China was in a very strong negotiating position.
Q: Do you see the two nations are getting closer to each other because of pragmatic needs instead of having long-term shared values?
A: China has many interests and naturally it shares interests with Russia. Russia is an important geopolitical partner and a valuable provider of gas and oil. On the other hand there are many interest China shares with western countries. Take for example the importance of high-technology imports from the west or trade relations. China’s prime interest is actually not to opt for one side or the other. I can see no reason why China should change this principle.
Talking about foreign policy principles, China did not seem to be happy about Russia unilaterally breaking international law, casting aside the principle of territorial sovereignty and non-interference by occupying a part of a sovereign country. Besides, China has made a lot of investments in Ukraine. Naturally they are concerned about their. China has not supported Russia’s actions in Ukraine. That has become very clear in the UN Security Council.
Q: On the South China Sea tension, do you think China is acting more aggressive towards its neighbours and which may affect regional stability?
A: China seems to have become more assertive. The situation in the South China Sea is at the same time tense and highly complex. It not only touches upon the interests of China and its neighbouring countries. We urge all sides to show restraint and seek negotiated settlements. In case no settlement can be reached, then the disputes should be brought to an international judicial body.
Q: Do you see China is trying to unilaterally change the status quo?
A: As I have said: China appears to be more assertive. And we have to acknowledge the fact that this has fueled discussions inside and outside the region about China’s peaceful rise.
Q: There is a study saying that the golden times of European enterprises in China are over. How are German companies doing in China?
A: If you look at the report and the findings, you will see that about 46 percent of the participants of the survey are convinced that “the golden ages are over”. But the majority of 54 percent still believe in a golden future for European companies in China.
Now, let’s look at the problems European and other foreign companies face. Wages have risen and economic growth has slowed from double-digit growth to only 7.5 percent last year. There is the fear that this number will further decrease. Thirdly, we still do not have a level playing field between Chinese and foreign companies. That is the biggest problem from our perspective.
German companies are generally quite optimistic and confident. They tend to be highly competitive. In 2013 German investment in China increased by 50 percent. Volkswagen has announced that it plans to invest 18 billion euro over the next years. Summing it up, I think the outlook maybe mixed, but definitely not bleak.
Q: How about the prospects of small and medium sized enterprises?
A: German small and medium sized companies want to invest in China. But they complain about market distortions and unfair competition. They need a level playing field. Many companies complain about interference by the state. That is the main reason why they invest less than they want. However, we should be careful not to overemphasize the problems
Q: Do you think that China is on the right track and has a positive global influence?
A: The Chinese leadership has repeatedly stressed China’s peaceful rise. And we believe that a peaceful rise is in China’s own best interest. An over-assertive China would run the run the risk of tempting smaller countries to form alliances against China. China should not allow any doubt to arise regarding its peaceful rise.