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China and Germany both need free trade, especially when facing a protectionist US
The unconventional Donald Trump presidency, which commenced on Friday, creates enormous uncertainties to the world. It will not only have huge impact on international affairs, but might also reshape multilateral relations, regionally and globally. A strong protectionist, Trump's tough trade strategies are also seen as a main threat to globalization, which major powers including China and Germany support.
On Thursday, one day prior to Trump taking office, Global Times reporter Zhang Xin (GT) spoke to German Ambassador to China Michael Clauss in an exclusive interview about how the China-German partnership will develop under these new circumstances and what joint efforts can the two sides make in 2017.
GT: US President-elect Donald Trump applauded Brexit and encouraged other EU members to leave and populism is now rife everywhere in Europe, is Germany confident in its ability to hold the bloc together?
Clauss: I am optimistic. Despite there being a rise of nationalism and populism in parts of the European Union, no responsible EU leader is playing with the idea of leaving the Union. Nobody sensible wants to give up the benefits of the internal market or other joint achievements. And if you look at recent opinion polls, conducted after the Brexit vote, you will see that support for EU membership has increased - in France, Italy, Poland and Germany. Leaving does not seem to be such an attractive option.
My optimism also arises from the situation in Germany itself. Germany is stable politically and economically. We are enjoying a comfortable growth rate, 1.9 percent in 2016, and the 2016 federal budget showed a surplus for the third year in a row. So we are in a good position to help keep the EU together. Recent signals from the US will also strengthen cohesion inside the EU.
GT: As Trump's strategies threaten to cancel out major powers' efforts in free trade, will Germany push for closer economic ties with China by helping China obtain market economy status recognition from the EU and being more prudent when launching anti-dumping probes against China?
Clauss: China and the EU both need free trade. Against the backdrop of a global rise of protectionist tendencies, we are ready to cooperate with whoever is willing to move free trade forward. My feeling is that there may now be more readiness in China and the EU, especially in Germany, to speed up talks on a bilateral investment treaty. It would have to include real progress on market access. This could pave the way for a comprehensive EU-China free trade agreement.
On the market economy status, we have been accommodating many of China's wishes. Although some disagreements between Brussels and Beijing remain, I do not see these disagreements escalating to a trade war. If we really agree to disagree, the WTO court will rule and settle the issue definitively. At any rate, I am sure a solution will be found in a very friendly manner.
GT: China and Germany are staunch defenders of globalization, what do you think the two countries can do to keep the momentum of globalization going and to oppose protectionism?
Clauss: I'm sure the G20 summit in July in Hamburg will be a big opportunity for both of us to continue shaping globalization and to defend it against contrary trends, such as protectionism. Deglobalization would not be in China's or Germany's interest, and that's the common ground from which we can intensify our cooperation at G20. Another German priority on the G20 agenda is jointly adhering to our commitments made by all of us at Paris to fight climate change. Germany and China both want the Paris Accords to succeed. We have worked well in the G20 troika under the Chinese presidency in 2016 and together will continue to shape the G20 agenda in 2017 and make it a success. The two of us should be staunch defenders of globalization, because we are the ones who benefit most from globalization. So joining forces on the multilateral level, like G20, makes sense. However, opposing protectionism begins at home. That is why Germany will stay open for Chinese investment, and why we ask for more reciprocity from the Chinese side. It is encouraging to hear President Xi's pledge in Davos to further opening up China's market. We expect that China will walk the talk.
GT: Trump criticized Germany's immigration policy and challenged China in several domestic and regional issues, including the one-China policy and the South China Sea issues. What do you think the shared pressure from Trump will bring to the China-Germany ties?
Clauss: It will take some time before the new US administration is settled in and then we'll see what the concrete policies are going to be like.
It's still too early to tell how they might reshape the ties between China and Germany, but it's clear that we share quite a few common interests and that certainly will not change. We will remain an attractive partner for China, because we will not suddenly change what has made our partnership a success. You might have noticed that when Chancellor Merkel was recently being asked about the one-China policy, she said there was no change to be expected in the German position, full stop. Another example concerning free trade: We do not believe that unilaterally imposing import tariffs would be rational. A trade war would be detrimental to all of us. Problems have to be resolved by negotiations, that's what we stand for.