Saturday, August 28, 2010

The Dangers of Germany's Dependence on China

Germany largely has China to thank for its current economic upswing, given the Asian powerhouse's demand for German machine tools and other such products. But many German industrialists are asking themselves how long the symbiotic relationship can go on, given Beijing's ambition to become a high-tech economy itself. By SPIEGEL Staff.

It's a humid Friday afternoon in Beijing, where German Chancellor Angela Merkel is addressing a friendly crowd of 80 students from the Central Party School, the Chinese Communist Party's highest training institution for its officials. A banner on the wall behind her reads: "Welcome, Chancellor Merkel."

But on this day Merkel doesn't have much time for niceties. Of course she admires the country's economic vitality, she says, and is impressed by how quickly China has overcome the financial crisis. But, she adds, it's also important to address the country's deficits -- which she then proceeds to do.
China's protections for intellectual property are not up to Western standards, says Merkel. Besides, she adds, Chinese companies have the bad habit of siphoning off technical expertise from their German partners.

At the end of her speech, the German chancellor hands the future elite of the Chinese Communist Party a few lessons in democracy. There are currently five parties in the German parliament, she says, and although this can be vexing at times, it's also productive, because the multiparty system ensures that every issue and every cause finds a voice. "This is why we ask ourselves: Can one party achieve as much as five parties achieve in our country?"

Merkel's open words in the heart of a one-party dictatorship clearly illustrate how the chancellor -- all diplomatic niceties aside -- feels about Germany's East Asian trading partner. She is well aware of the opportunities in the world's largest market, which is home to 1.3 billion people. But Merkel also knows that business leaders in Germany are starting to feel uneasy about the unstoppable rise of Chinese industry.

Some are already wondering whether the supposedly lucrative China connection will turn out in a few years' time to have been a pact with the devil.

To read more: http://www.spiegel.de/international/world/0,1518,713478,00.html

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