TAIPEI, TAIWAN —

German Chancellor Olaf Scholz will begin a three-day visit to China on Saturday, aiming to strengthen Germany’s deep economic ties with China at a time of rising trade tensions between Beijing and the European Union.

Schulz visited China for the first time since the German government released its first China strategy in July, emphasizing the need to reduce economic dependence on China. He was also accompanied by executives from major German companies such as Siemens, Volkswagen, and Bayer, as well as three cabinet members. Ministers.

Some analysts say that bilateral economic relations will be the main focus of Scholz’s trip.

Max Zenglein, chief economist at the Mercator China Institute in Berlin, said: “He will try to focus on the positive elements in Germany-China relations and try to cultivate more in key areas related to Germany’s main industries. Partnership and cooperation.” VOA said in a video interview on Wednesday.

The visit comes as some of Germany’s major industries are seeing revenue declines in China. According to car company data reported by Reuters on Wednesday, sales of many German high-end automakers fell sharply in China in the first quarter of this year, with Mercedes-Benz and Porsche seeing double-digit percentage declines in China.

In addition, a recent report released by New York-based research firm Rhodium Group found that the German auto industry faces fierce competition from China, with German companies’ market share in China falling by 4% since 2018.

“The losses mainly come from volume producer Volkswagen, which will sell fewer cars in China in 2023 than in 2013,” the report said, adding that although the market share of Volkswagen’s China joint venture fell to its lowest point in a decade, China’s passenger car market overall grew by 5.6%.

Rhodium Group found that instead of re-evaluating their approach to the Chinese market, some of these companies were reinvesting the profits they made in China “to remain competitive.”

Zenglein said that during Schultz’s visit, he may focus on helping some German companies that rely heavily on China to maintain their economic interests in China.

Scholz told VOA that he may feel the need to “signal to the corporate sector that he is willing to provide appropriate political flanking to their economic interests.”

Other experts say some German companies are struggling to adapt to changes in the Chinese market because they are too dependent on the benefits the market offers.

“As the German economy faces pressure from many aspects, including the need to support Ukraine and sluggish economic performance, the German government will work hard to maintain close economic and trade relations with China in the short term so that German products can continue to be sold to the Chinese market,” Brussels-based European Asia Research Zhang Junhua, a senior researcher at the institute, said.

However, he said he believed the efforts would contradict calls from the German government for companies to reduce their economic dependence on China.

“As Germany’s economic performance remains sluggish, the government has to succumb to pressure from the business community and make compromises in implementing its China strategy, which urges German companies to avoid China risks,” Zhang told VOA by phone.

German companies “go against the international trend”

At the same time, the EU has launched a series of countervailing investigations into green energy products such as electric vehicles and wind turbines imported from China.

European Commissioner Margrethe Vestager said the EU needed to take a more systematic approach to handling investigations. “We need to act before it’s too late, [and] We cannot see what happened to solar panels happen again to electric cars, wind power or important chips,” she said on Tuesday about China’s dominance of the European solar panel market.

In response, China’s Ministry of Commerce said on Thursday it firmly opposed the EU investigation, calling it a “protectionist act that harms a level playing field in the name of fair competition.”

China will pay close attention to the EU’s subsequent developments and reserves the right to take all necessary measures. said in a statement.

Although Scholz’s chief economic adviser, Joerg Kukies, said at a think tank event in Berlin last September that Berlin supported the EU’s anti-subsidy investigation into Chinese electric vehicles, Scholz said in the same month that In an interview with the German business weekly Wirtschaftswoche, he said he “does not believe” the EU’s countervailing investigation into Chinese electric vehicles. It is necessary for the EU to impose tariffs on Chinese electric vehicles.

“Our economic model should not be based on or dependent on protectionism but on the attractiveness of our products,” Scholz said in an interview.

In Zenglein’s view, some German companies’ increased investment in China is “going against the international trend.” “This trend is driven by capital-intensive industries such as automotive and chemicals,” Zenglein said. According to a report by Rhodium Group, major German automakers such as Volkswagen and German chemical group BASF continue to increase investment in China.

Russia, green energy industry

While bilateral economic relations will be a major topic of the trip, both Zenglein and Zhang said they believe Scholz will still try to express German concerns about China’s close partnership with Russia and overcapacity in China’s green energy industry uneasiness.

“Germany’s concerns about China’s partnership with Russia will be a major part of the discussion because Scholz has strong views on it,” Zhang told VOA. “But since Germany has no effective measures to put pressure on Beijing, Scholz’s warning will not have much impact on how China evaluates its partnership with Russia.”

Zenglein believes that Scholz will try to quickly “dispel” concerns about geopolitical risks. “He will try not to focus too much on the negative aspects of bilateral relations, which could be counterproductive to the positive development of bilateral economic relations,” he said.