Europe’s financial woes are well documented, but the malaise of the grand European political project has received far less attention. Decades of painstaking diplomacy aimed at uniting the continent into a single political entity have stalled and may even be reversing. At least that’s the view from Beijing.With Chinese Premier Wen Jiabao due to meet German Chancellor Angela Merkel at the Hanover trade fair this weekend, the Financial Times reports that China is giving up on Brussels and shifting its attention to Berlin:
A decade ago, Beijing had hoped that a stronger EU would make Brussels a one-stop shop for its diplomatic and business affairs in Europe. Now it focuses more on Berlin.“A disappointment is that the EU is not a single entity,” says Song Xinning, professor at Renmin university who advises the government on Europe. “You can’t expect to work just with Brussels. You have to work with both – and the member states take the leading role.”
The EU was designed to foster cooperation and consensus among member nations big and small. But as the financial crisis has deepened, Germany’s influence—already high to begin with—has increased considerably on the back of its relatively strong economy. China understands this new reality and is lavishing more attention on Germany as a result.Indeed, at first glance, the two countries appear to be getting along remarkably well. From Germany’s perspective, China is a potential solution to Europe’s financial woes, since Beijing has demonstrated a far greater willingness than the U.S. to support the Continent during the crisis. On the trade front, too, the two countries are forging close ties. Bilateral trade reached €144 billion last year, and China is Germany’s official “partner country” at the Hanover trade fair.Behind this apparently happy courtship, however, lurks considerable tension. Germany is worried about Chinese competition, particularly in the engineering sector which has traditionally been its strength:
Even as they celebrate a surge in exports, German business leaders will seek reassurances from Mr Wen. At a German-Chinese economic forum in Hanover on Monday, they are expected to call for curbs on unfair competition in third markets, for tougher controls on illegal copying of German technology patents, and for China to lift restrictions on the export of its rare earths, needed for mobile phones and other high-tech products.
Another issue that may undermine the Sino-German relationship is the EU arms embargo against China. Instituted following the events in Tiananmen Square in 1989, there have been efforts to have the embargo dropped, but these efforts have met furious resistance in Washington. It’s worth watching whether that subject gets back on the table.It remains to be seen whether the eurozone crisis proves to be a blip on the radar for European integration or the beginning of a death spiral for Brussels. But until Europe puts its financial house in order, expect other countries to follow China’s lead and deal with individual countries rather than the Union as a whole.