Trade a key focus for Merkel in China

Chinese Premier Li Keqiang speaks during a joint press conference with German Chancellor Angela Merkel after their bilateral meeting at the Great Hall of the People in Beijing yesterday.
Chinese Premier Li Keqiang speaks during a joint press conference with German Chancellor Angela Merkel after their bilateral meeting at the Great Hall of the People in Beijing yesterday.PHOTO: EPA-EFE

Li pledges to open doors wider to trade and protect German investments in China

Chinese Premier Li Keqiang pledged to further open the country's doors to trade and to protect German investments - assuaging concerns of German companies that foreign firms were treated unfairly in relation to local ones.

"China's door is open. You can say it will open even wider," said Mr Li at a joint press briefing with his German counterpart Angela Merkel after their bilateral meeting at the Great Hall of the People yesterday.

Dr Merkel's visit to China, her 11th as Chancellor and first since re-election last year, comes at a time of rising trade tension but also as the two sides share an interest in upholding multilateralism and free trade in the face of American retreat from both.

Acknowledging that German companies had encountered problems in China, Mr Li said: "We will abide by Chinese law and ensure that we protect the rights of German firms that invest in China."

He said that if rules did not meet requirements to better attract German investors, "we'll make appropriate adjustments".

Mr Li was responding to a question from a German reporter on the German business community's fears of a lack of protection for German investments in China.

The European Chamber of Commerce in China said in a paper last September that 54 per cent of European firms thought they were treated less favourably than Chinese firms. Also last year, it said European businesses faced intense pressure to turn over advanced technology in exchange for market access under China's Made in China 2025 policy to boost local high-tech industries.

Dr Merkel, for her part, wants more Chinese investment in Germany, despite some concerns.

Noting that China has been investing increasingly in Germany, she said: "I want to expressly say that for us that's appropriate."

While Germany's investments in China stood at €76 billion (S$119 billion) in 2016, said Dr Merkel, China's investments in Germany total just €4 billion.

Chinese investments have raised concerns in Germany because they are mainly in small and medium-sized technological firms that are drivers of German innovation.

Dr Merkel said China and Germany were "committed to free and fair trade" and multilateralism.

Later at a business forum, she said that in areas where China was "the absolute technology leader", Germany wanted "reciprocal access".

Mr Li yesterday praised Germany's effort to save the Iran nuclear deal which the US pulled out of this month. He added that China - one of the signatories - is committed to safeguarding the deal.

On human rights, he said China was willing to discuss individual cases with Germany on the basis of mutual respect and equality.

Dr Merkel also met Chinese President Xi Jinping, who said China welcomes Germany's participation in its new round of opening up and it is willing to continue to work with Germany to promote global governance and multilateralism.

A version of this article appeared in the print edition of The Straits Times on May 25, 2018, with the headline 'Trade a key focus for Merkel in China'. Print Edition | Subscribe