German Chancellor Olaf Scholz in China: More and More business

German Chancellor Olaf Scholz arrived in China on Sunday, April 14, for a three-day visit aimed at strengthening economic relations with Berlin’s main trading partner. Scholz landed in Chongqing, one of China’s largest industrial centers, along with a large delegation of ministers and businessmen, including Agriculture Minister Cem Ozdemir, Transport Minister Volker Wissing, and Environment Minister Steffi Lemke. “China remains an important economic partner,” Scholz told reporters, emphasizing that he will “try to achieve more competitive conditions for German companies operating in the world’s second-largest economy.”

Germany has been China’s main trading partner in Europe for 49 consecutive years, while Beijing has been Berlin’s main trading partner for only eight consecutive years. Germany’s direct investment in China reached a record high of about 12 billion euros in 2023, and on the eve of Scholz’s trip, the Volkswagen Group announced a new investment of 2.5 billion euros to expand in China.

Scholz’s visit is the second official visit since the chancellor took over the reins of the German government in 2021. The trip comes at a special time: on the one hand, trade tensions between China and the European Union risk worsening after an antitrust investigation launched by Brussels against Chinese manufacturers of cars, solar panels, wind turbines, and railroad cars. On the other hand, diplomatic contradictions are increasing, especially due to tensions between Beijing and Taiwan. Moreover, on a geopolitical level, Scholz will try to persuade Chinese President Xi Jinping to use his influence to restrain his Russian counterpart Vladimir Putin and help end the war in Ukraine. “Given the close relationship between China and Russia, Beijing has an opportunity to influence Moscow,” a German government source explained.

But politics will not be the dominating subject. As Scholz’s chancellery stressed, the visit will have a “clearly pragmatic, economic, industrial, and commercial” effect: on Sunday, April 14, Scholz visited the German company’s production site for clean hydrogen engines in Chongqing. The Shanghai headquarters of a German plastics manufacturing company working on environmentally friendly and sustainable technologies was shown to Scholz on Monday, April 15. On Tuesday, April 16, Scholz will be received by President Xi Jinping and Premier Li Qiang of the State Council in Beijing, after which the German chancellor will attend the China-German Economic Committee meeting together with Premier Li Qiang.

For the Chinese media, Scholz’s visit represents to some extent simply “a return to normalcy in bilateral relations.” According to the Chinese English-language Global Times (Huanqiu Shibao) newspaper, this reflects that “Germany still has a tradition of pragmatism, rationality, and mutually beneficial cooperation with China. An example that many other Western countries should follow.”