Olaf Scholz goes to China

Paying homage to emperor Xi, Germany’s chancellor is stepping in to Angela Merkel’s mercantilist shoes

This month Xi Jinping confirmed a decisive step in China’s transition from an authoritarian to a totalitarian state. Next month Olaf Scholz plans to pay homage to the new emperor in Beijing. Scholz will take with him a planeload of business leaders in search of export deals. Is this what the German chancellor meant by Zeitenwende? 

The Communist party congress left Xi a more absolutist leader than any since Mao Zedong. The rule of the party has been replaced by the will, and whim, of the supreme leader. The politburo has been stacked with loyalists and acolytes. There is every indication that Xi intends to hold power indefinitely. Scholz’s business-as-usual visit will be heralded as legitimising the new order.

Political repression at home, which includes forcibly detaining hundreds of thousands of Moslem Uighur in so-called education camps in Xinjiang province, is matched by an uncompromising stance abroad. In its furious reaction since the Taiwan visit of US House speaker Nancy Pelosi, Beijing abandoned any pretence that it prefers accommodation to confrontation with the west. 

The militarisation of the South China Sea and live fire military exercises calculated to intimidate Taiwan are part of the same story. Beijing wants unchallenged hegemony over the western Pacific. Further afield, the Belt and Road initiative has come to resemble more an exercise in economic coercion than development.

Scholz’s message is that none of this should be allowed to disturb Germany’s economic relationship with its most valuable market. Industry, it seems, is suffering enough from the cut-off of Russian gas that has followed Vladimir Putin’s military aggression in Ukraine. German companies should surely not be punished twice. 

To assure himself of a warm reception in Beijing, Scholz has overruled several members of his cabinet to give the go-ahead to the Chinese shipping company Cosco to buy a 25 per cent stake in Germany’s largest port in Hamburg.  By the account of senior politicians in Berlin, the state-owned Cosco threatened to divert its shipping business to Rotterdam unless it secured approval. 

Not everyone in the German capital is so eager to please Beijing. The SPD’s Green coalition partners have been vocal in calling for a more principled foreign policy in which there is some room at least for values. Half a dozen ministers in the coalition argued against handing to Beijing a large stake in the nation’s critical infrastructure. Nor should it give in to blackmail. Scholz, with a nod to his former role as Hamburg’s mayor, insisted the deal go ahead to secure the economic future of the port.

So what then of Zeitenwende? Remember that stirring speech in the Bundestag following Russia’s unprovoked invasion of Ukraine? It seemed to herald a transformation. Germany had at last admitted that the international order was under threat and would assume its share of the burden of protecting the rules-based system. That was the promise. 

Scholz was lauded for jettisoning the self-serving mercantilism that saw his predecessor Angela Merkel claim that the only way to deal with adversaries was to trade with them. The new, more responsible Germany would share the security burden, with a €100bn investment in new military equipment as a downpayment. A new national security strategy would set the nation’s economic relationships in the broader strategic context.

There have been some changes. Germany has broken with the past by supplying weapons to Ukraine. It has said never again to dependency on Russian gas. The chancellor has promised a more balanced appraisal of relations with authoritarian regimes.

Yet it has been clear almost from the moment of his speech that Scholz is reluctant to admit the implications of its analysis. The arms supplies for Ukraine have been deliberately modest. Transfers of heavy weapons have been restricted. Ukraine’s success on the battlefield has seen him step back somewhat from attempts to push Kyiv into negotiations, but the chancellor is impatient of those eastern and central European leaders calling for Putin’s decisive defeat. In conversations with other German politicians he has been heard to describe these allies as “warmongers”.

European nations, Scholz told fellow leaders at a recent Brussels summit, must not fall into the trap of “uncoupling” from China in response to Russian revanchism. In truth, no-one is suggesting that Berlin, or any other government, should break off economic relations with Beijing. Nor, for what it’s worth, that the EU should invariably take a lead from China hawks in Washington. What’s evident, however, is that the challenge to the post cold war order from Moscow and Beijing is indivisible.

Xi and Putin said as much when they met in Beijing weeks before the attack on Ukraine. Their strategic partnership, they declared, would know no limits. Its objective is to challenge the west. The Ukraine war was a wake-up call about Russia. If Xi has since been embarrassed by Putin’s military adventurism it is only because the invasion failed.

Europe needs a framework that sets its trade, investment and technological exchanges with China in this broader security context. Emmanuel Macron’s suggestion that the German and French leaders travel jointly to Beijing might have been a step in this direction. Scholz has so far rebuffed the idea, lest it disturb Germany’s sales pitch. Welcome back Mrs Merkel.