Intensifying the Pressure

Economic Intertwining

Last year according to a report of the German Asia-Pacific Business Association (in Hamburg), the People's Republic of China reinforced its position as Germany's most important non-European trade partner. China, which had already squeezed pass the United States in 2009, with a bi-lateral trade volume of around 94 billion Euros (USA: 93.7 billion Euros), had greatly expanded its lead in 2010. According to the German Federal Statistical Office, the difference in the trade volume between the People's Republic (130.1 billion Euros) and the USA (113.7 billion Euros) has reached 16.4 billion Euros, which moves China closer to Germany's most important European trade partners, trailing just behind The Netherlands (132 billion Euros). Even France, Germany's most important trade partner, with a bi-lateral trade volume of 152.5 billion Euros, will, according to the prognosis of one of the Asia-Pacific Business Association's board members, soon be passed by. "If bi-lateral trade continues to develop at this rate, it will only take a few more years for China to replace France as Germany's main trade partner."[1]

Trade Lobbyism

The Asia-Pacific Business Association, which sees its mission in promoting "the expansion of business relations in the dynamically developing Asian-Pacific realm,"[2] acts as a sort of branch lobby, for German enterprises which are engaged in Asia - particularly in China. They are currently benefiting from the Chinese boom, which, already back in 2009, had risen to among the top 10 importers of German products. In 2010, with a new surge of 43.9 percent to 53.6 billion Euros, China had already achieved seventh place - with an upward tendency.[3]

Automobile Industry

The German growing dependence on the Chinese market can be clearly observed in the automobile production, which is so important for Germany. In 2009, for example, Volkswagen sold more cars in China than it did in Germany - in spite of the strong 18.3% increase in domestic car sales.[4] In the first quarter of 2010, VW was able to increase its car sales by 60 percent in the People's Republic. The German firm, seeking to relieve Toyota of its crown as the king on the global car market, is planning further increases in sales to China.[5]

Deficits

Even though the Chinese import policy has not been seriously affected by the crisis, these record breaking statistics still harbor a contradiction. The German foreign trade deficit in relation to China is also growing - reaching about 80 billion Euros in 2010 - to the benefit of the Chinese foreign exchange reserve, which has reached the astronomical sum of 2.9 trillion US dollars, mainly invested in US assets. The Chinese government is gradually reducing the dependency on the US dollar for its exchange reserve also through foreign investments - 71 percent in Asia and 13 percent in Latin America.[6] China is now seeking to invest in the highly capitalized and economically effective national economies of the USA and the most powerful EU countries. This is being done in several steps: first, China had invested in diverse European and US-American companies in distress or in a crisis situation. Now, Chinese firms are, themselves, beginning to expand into the western metropoles. Due to the contradictions that have developed within the EU over the crisis, China can now penetrate a formerly hermetically locked domain and buy lower value government bonds from EU states. These will not make much profit directly, but enhance political ties. (german-foreign-policy.com reported.[7])

Fear

In Berlin and Brussels, this scenario is spreading the fear that their global economic influence will be restricted. The German EU Commissioner Guenter Oettinger summed up this dilemma in dramatic terms: "China is taking over the EU and we, Europeans, are selling our souls."[8] For the moment, this development, at least at EU level, cannot be economically thwarted due to the main EU countries' essential differences in questions of crisis management. The Chinese intervention supports are therefore being accepted, to prevent the possible collapse of entire EU nations. Now, in cases where it is no longer possible to counter the People's Republic's growing influence within the EU, political pressure is to be applied - through increased pressure on the Chinese government.

Strollers

The most recent attempt to apply pressure was made in the wake of the protest movements in the Arab world. German media sought to discern similar rebellions taking place in China and reported prominently on an alleged Chinese "Jasmine Revolution" being supposedly brutally repressed in several Chinese cities.[9] But in fact, it was but a few hundred, possibly even only a few dozen demonstrators in Beijing and Shanghai, who had taken part in these protests, camouflaged as "strolls", something even the German media has had to confess.[10] The obviously unsuccessful attempt to fire up social protests at this time in China, resembling those currently occurring in Arab countries, with, for example, youth unemployment rates often higher than 30%, shows ignorance of current Chinese relations. In a national economy that has been booming for decades, where the grand majority of the Chinese population has experienced a steadily higher living standard, there can be little hope of successfully inciting poverty protests.

The "Jasmine Revolution"

In fact, the Chinese "Jasmine revolutionaries" are a small group of urban political dissidents, who have been wooed by Berlin and the West - recently, with the awarding of the Nobel Peace Prize to Liu Xiaobo.[11] These circles currently have no particular influence on the People's Republic of China, but western governments consider them a reservoir of potential coalition partners, in case the economic developments in China should, one day cause profound political upheavals. This explains the German media's strong interest in these Chinese dissidents - while the opposition to Arab dictatorships only received media attention in Germany, when the pro-western dictatorships began to crumble and Berlin's old allies became hard pressed.

[1] China ist größter außereuropäischer Handelspartner Deutschlands; www.oav.de
[2] Über uns; www.oav.de
[3] China ist größter außereuropäischer Handelspartner Deutschlands; www.oav.de
[4] VW verkauft mehr Autos in China als in Deutschland; manager-magazin.de 24.07.2009
[5] Absatz-Boom: VW verkauft 60 Prozent mehr Autos in China; www.spiegel.de 12.04.2010. See also Deutschand gegen China (II)
[6] China Annual Outbound Direct Investment, Ministry of Commerce, People's Republic of China
[7] see also Feinde in der Not
[8] China nutzt die Euro-Krise; www.zeit.de 28.11.2010
[9] China kämpft mit Stasi-Methoden gegen Aufruhr; www.bild.de 10.03.2011
[10] China unterdrückt geplante Proteste; www.rp-online.de 06.03.2011
[11] see also Germany Versus China (III), Federal Republic of China and Der Nobelpreiskampf