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German Chancellor Angela Merkel and Chinese President Xi Jinping shake hands as they pose for photographs ahead of a bilateral meeting in Paris, France in March 2019. Photo: EPA-EFE

Angela Merkel and Xi Jinping discuss ‘close economic ties’ in likely last official call together

  • Merkel called the EU-China investment deal ‘mutually beneficial and win-win’, according to a Chinese readout of Friday’s call
  • German readout did not mention the controversial Comprehensive Agreement on Investment; Merkel’s office says they talked about Afghanistan, economic issues
Outgoing German Chancellor Angela Merkel used what is likely to be her last official call with Chinese President Xi Jinping to repeat support for close economic relations between the two countries, according to China.
Just over two weeks from election day, Merkel called the EU-China investment deal – which has been effectively killed by the European Parliament because of Beijing’s sanctioning of officials – “mutually beneficial and win-win”, according to a Chinese government readout of Friday’s call.

Xi thanked Merkel for being “actively committed to promoting practical cooperation and friendly exchanges between Germany and Europe with China” and “the high level of mutual trust between China and Germany”.

The tone was starkly different from his call earlier in the day with US President Joe Biden, where Xi “pointed out that for some time, due to the US policy on China, the China-US relationship has run into serious difficulty”.


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A brief German readout of the meeting did not mention the controversial Comprehensive Agreement on Investment (CAI), concluded in principle last December but frozen by MEPs in May. Merkel’s office said they spoke primarily about “developments in Afghanistan”, economic issues and other subjects including the coronavirus pandemic and climate change.

The long-standing German leader has been the architect of close commercial ties between Germany and China during 16 years in office.

But her party’s candidate in this month’s election, Armin Laschet, is trailing badly in polls. With the likelihood of a new government in Berlin, it is uncertain whether the cosiness with Beijing can continue.

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Senior foreign policy officials from each of the four mainstream parties called for a rethink in Germany’s foreign policy in the Indo-Pacific region at the launch of the Berlin office of the security think tank International Institute for Strategic Studies on Tuesday.

The Social Democratic Party (SPD) leads in the polls, and while candidate Olaf Scholz has said virtually nothing about China in the campaign, SPD foreign affairs spokesman Nils Schmid told the Post in Berlin this week that there can be no progress on the CAI while sanctions remain on MEPs and others.

The Greens and Free Democratic Party are predicted to be kingmakers in the election, with each tipped to join the SPD in a “traffic light coalition” – so-called because of the red, green and yellow colours of the respective party logos. Neither party will support the CAI in its current form.

German Chancellor Angela Merkel was the EU’s chief sponsor on the EU-China investment deal. Photo: AFP

At Tuesday’s event, Alexander Graf Lambsdorff, foreign policy spokesman for the Free Democratic Party, a pro-business group, said that while it is generally supportive of open markets and free trade and investment, it would not support the deal until China makes improvements to its human rights and labour rights conditions.

Merkel’s own Defence Minister Annegret Kramp-Karrenbauer used the event to decry the “lack of political will” to reform policy towards the Indo-Pacific region, without mentioning China by name. Kramp-Karrenbauer said she wanted the EU to establish a “permanent presence” in the region.

The EU is expected to release further details on its nascent Indo-Pacific strategy next week.

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Merkel’s support for the CAI is not altogether surprising: she was EU’s chief sponsor on the deal and annoyed some of her European counterparts by forcing it over the line on the last day of Germany’s presidency of the Council of the EU in December.

But its struggles in the European Parliament presented a second defeat on her desired China policy, after members of her own domestic party had voted against her plans to include Chinese telecoms firm Huawei Technologies Co., in the national 5G infrastructure.
The recent death of Germany’s ambassador to China Jan Hecker, just days after taking the job, represented another blow for the outgoing chancellor.


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Hecker was a close confidant of Merkel on foreign policy issues. In Berlin circles, his appointment was seen as both confidence that Merkel’s conservative faction would remain in power and also that she had little appetite to reform the German-China relationship.

German analysts have suggested that whoever is Merkel’s successor, they will struggle to maintain the status quo on China, with relations becoming increasingly fraught in recent years. A poll by the European Council on Foreign Relations (ECFR) found that 47 per cent of Germans “regard China as a rival or outright adversary that is in conflict with Europe”.

Janka Oertel, director of the ECFR’s Asia programme, said that while Merkel-era policies “focused on enhancing and deepening trade relations with China, while hoping that the country would slowly adapt and integrate into the rules-based international order, made sense at the time”, they are out of date given the increasingly authoritarian and assertive nature of China under Xi.

“The Chinese leadership has defined its own decoupling and autonomy agenda, which is enshrined in President Xi Jinping’s speeches and the party’s latest five-year plan,” Oertel wrote in a note.

This article appeared in the South China Morning Post print edition as: Merkel ‘touts the EU-China investment deal’ in phone call with Xi, Beijing says