China’s Li Qiang warns of ‘de-risking’ risks as EU momentum builds for economic security strategy

Chinese premier pitches ‘openness and cooperation’ as pressure mounts in Brussels to protect bloc from economic dependencies, strengthen resilience
Li is expected to send similar messages in meeting with French President Emmanuel Macron

China-EU relations

Hayley Wong

Published: 10:00pm, 22 Jun 2023

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Chinese Premier Li Qiang has urged business leaders in France and Germany to insist on technological cooperation and free trade as pressure mounts in Brussels to “de-risk” from China.

As Li wrapped up his first overseas visit to Germany as premier on Wednesday, he travelled to Paris and sought “a fair, transparent, and non-discriminatory business environment for Chinese companies” in France, Xinhua reported on Thursday.

“We hope that Chinese and French entrepreneurs will firmly support economic globalisation … and work together to maintain the stability and resilience of the supply chain between China, France and Europe,” Li told a banquet attended by French senior officials and business leaders.

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There was a great potential for both sides to cooperate in areas like hi-tech manufacturing, modern services, green transition and economic digitalisation, he said.

Li made similar appeals to business leaders during a round table meeting in Berlin on Tuesday, which was attended by German Chancellor Olaf Scholz.

“We hope Germany can continue preserving an open market and create a fair, transparent and non-discriminatory business environment for Chinese companies investing in the country,” he said, adding that Berlin should create a stable environment and let business “judge and manage risks” according to market developments and economics.

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Li’s pitches came amid growing calls from European countries and companies to de-risk from China. Earlier this week, Brussels rolled out its first economic security proposal, which is aimed at protecting the bloc from risks “inherent in certain economic dependencies”, while promoting its own competitiveness by making the economy and supply chains more resilient.

Speaking to the China-Germany Economic and Technical Cooperation Forum on Tuesday, Li pointed to his own experiences as he talked up the “promising” space of cooperation in the digital economy, artificial intelligence, and green development, according to a statement released by China’s mission to the European Union.

“I worked for a long time in local governments, and the cars provided were German cars. In my five years of tenure in Shanghai [as party secretary], the car [provided by the government] was a Volkswagen jointly manufactured by Shanghai Automobile and Volkswagen. I did not consider that a risk. When we visited the hospitals for CT or MRI examinations, they were all Siemens [equipment], but we never felt unsafe lying there,” he said.

“We think that none of these should be risks and China has never done anything to so-called de-risk from these issues.”

Li’s repeated calls for greater “openness and cooperation” throughout his tour came as concerns loomed within the European Union over strategic dependency on China.

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At a meeting with top German CEOs on Monday, Li warned that a lack of cooperation would be “the greatest risk”, and he pledged deeper cooperation in sectors like automobile manufacturing, hi-tech and new energy in a meeting with Scholz.

During his four-day visit to Berlin and Munich, Li signed cooperation agreements between China and some of Germany’s biggest science and technology giants, including BASF, Mercedes-Benz, BMW, and Volkswagen, according to statements from China’s National Development and Reform Commission.

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In Munich, Li met Bavarian Minister-President Markus Söder and toured a BMW exhibition centre, which has focused on electric car development and new energy, as well as autopilot vehicles, according to Xinhua.

The Chinese premier also toured the headquarters of Siemens to learn about new technologies in farming and robotics, as well as magnetic resonance imaging, and business digitalisation.

Li then left for Paris to attend the two-day Summit for a New Global Financing Pact beginning on Thursday. He is expected to meet several top government officials, including French President Emmanuel Macron.