Chinese Premier tells German CEOs to take lead on ‘de-risking’

BERLIN - Chinese Premier Li Qiang called for

“de-risking” decisions

to be taken by companies rather than governments, during a trip to Germany that is designed to stabilise ties with the European economic powerhouse.

“Enterprises have the most direct and acute sense of risks, and they know how to avoid and handle them,” Mr Li told representatives from about a dozen German companies in Berlin on Monday afternoon, according to the official Xinhua News Agency.

“So, enterprises should be given back the leadership role in preventing risks.”

The Chinese Premier added that risk prevention and cooperation are “not mutually exclusive”, according to the report.

Representatives from companies such as Siemens, Volkswagen, Mercedes-Benz Group, BMW, Schaeffler, BASF, Covestro, Wacker Chemie, Merck, SAP and Allianz attended the meeting.

US President Joe Biden and his European allies’ stated desire to “de-risk” from the Chinese economy has resulted in a push to strip China from high-tech supply chains with potential military applications.

Western democracies have also increasingly been looking to “friend-shore” manufacturing since the pandemic and amid rising geopolitical tensions.

China does not see the difference between “de-risking” and “decoupling”, with Foreign Minister Qin Gang saying at a press conference in Germany in May: “If the EU seeks to decouple from China in the name of de-risking, it will decouple from opportunities, cooperation, stability and development.”

Mr Li has chosen Germany – one of Europe’s more pragmatic nations on the China risk – as the first stop of

his inaugural overseas trip as premier.

On Monday, he met German President Frank-Walter Steinmeier before dining with German Chancellor Olaf Scholz in the evening, ahead of the seventh China-Germany inter-governmental consultation on Tuesday.

His visit has raised concerns that Chinese officials will try to influence the final wording of Berlin’s updated China strategy, which is due to be presented at the beginning of July.

China is stepping up efforts to engage business leaders from nations that Beijing is sparring with on everything from trade to Taiwan.

Chinese President Xi Jinping last week told Microsoft co-founder Bill Gates that the foundation of bilateral ties between China and the US “lies among the people”. 

Senior Communist Party leaders in May rolled out the red carpet for a slew of luminaries, including the chief executives of Tesla and JPMorgan Chase & Co, Mr Elon Musk and Mr Jamie Dimon, respectively.

That engagement comes as foreign direct investment in China has plummeted, with investors pulling US$30 billion (S$40.2 billion) out in the first quarter.  

The Chinese Premier will also head to France this week for talks with President Emmanuel Macron, according to China’s Ministry of Foreign Affairs.

He could also have the opportunity to speak to US Treasury Secretary Janet Yellen in Paris, as both are scheduled to attend a development finance summit in the French capital this week.

BLOOMBERG