German Chancellor Angela Merkel is wary of business over-dependence on China. She is especially concerned about the Chinese investments in Greece where Cosco has been winning the cream of the cream in public privatization tenders.
In an interview with German weekly magazine WirtschaftsWoche, Merkel said Europe needed to be wary about opening its markets to products that had been developed with public subsidies in China and should demand reciprocity on access to public tenders.
Merkel was especially wary about pressure that China can put on economic weak countries, Greece included.
“Reciprocal dependencies are increasing and the balance is constantly shifting. Europe has to work hard to protect its influence and above all it has to speak with China in one voice,” she said.
“Europe should demand should demand reciprocity on access to public tenders. China’s economic might puts it in a position to pressure weaker European Union members,” Merkel added.
Germany is considering whether some industrial sectors should be designated as being of strategic importance to Europe, Chancellor Angela Merkel said, adding that there was a risk of companies becoming over-dependent on the emerging giant.
In June, Greece blocked a European Union statement at the United Nations criticising China’s human rights record. Hungary, another large recipient of Chinese investment, has also vetoed similar measures.
EU diplomats said the veto undermined efforts to confront Beijing’s crackdown on activists and dissidents. A Greek foreign ministry official said Athens blocked the statement, calling it “unconstructive criticism of China” and said separate EU talks with China outside the U.N. were a better avenue for discussions.
China’s heavy investment in Piraeus port and other Greek infrastructure was met by the EU with raising eyebrows. However, China has been pouring money into Greece’s infrastructure sector, viewing the cash-strapped country as a strategic gateway to Europe. From the Greek government’s perspective, Chinese investment offers hope for keeping the economy afloat. As expected, Beijing had welcomed Greece’s veto.
“Seen from Beijing, Europe is an Asian peninsula,” Merkel said.
“We see this differently, but the fact is that large parts of the German economy are dependent on China. That means we need to find a way of turning China’s demands to the benefit of all.” Her comments echoed proposals by France’s President Emmanuel Macron, but stopped short of his call for Europe to have the power to veto Chinese investments.
“We in the German government are considering defining industries of strategic importance to Europe,” such as microchip manufacture, she said. The European Commission will also consider “screening” sales to China of companies with “strategic” expertise, in fields like artificial intelligence.
China is an increasingly important partner for Europe both politically and economically. Beijing stepped up as an ally for Europe in the fight against climate change after U.S. President Donald Trump’s decision to withdraw from the Paris Climate Agreement.
PS I suppose this is what we call “austerity policies and failed programs backfire.” If I’m not wrong it was Greece’ lenders putting pressure on privatizations, no?