BRIEF POLICY

CHINA AND : WHY THE EMERGING SPECIAL RELATIONSHIP MATTERS FOR EUROPE Hans Kundnani and Jonas Parello-Plesner

Europe’s future relationship with China – one of its most SUMMARY The increase in trade between China and important “strategic partners” – will be determined to Germany during the last decade – and, in a large extent by Germany’s rapidly evolving bilateral particular, in German exports to China – has relationship with China. Germany is China’s number-one exceeded all expectations. Based on the economic trade partner in the EU: nearly half of all EU exports to China symbiosis between China and Germany, a come from Germany; nearly a quarter of EU imports from “special relationship” is now developing – just as China go to Germany. The increase in trade between China Europe is beginning to develop a more strategic and Germany during the last decade – and, in particular, in approach to China based on a clearer definition German exports to China – has exceeded all expectations. of the European Union’s common interests and In fact, China is now the second-largest market for German how to pursue them. Against the background of the euro crisis, China increasingly seems to see exports outside the EU and is poised to overtake the United Germany as the dominant player in Europe and States as the largest this year, if growth continues. one whose economic dependence on China and strategic preferences make it a preferred partner. The burgeoning economic interdependence between China and Germany, based on a technology-for-markets swap, Germany’s instincts remain European, but is the basis for an increasingly close political relationship officials are frustrated by the failure of their that was upgraded to a new level last June when Chinese attempt to develop a common strategic European Premier Wen Jiabao came to with 13 ministers and approach to China and do not feel they can wait held a so-called government-to-government consultation – any longer. Germany must not give up on Europe. in effect, a joint cabinet meeting. Germany had previously But the rest of Europe also urgently needs to help held such meetings with other countries such as Germany to be a good European by developing a real “strategic partnership” with China before it and Israel and also since last year with India. But it was the is too late. The EU should identify where Europe first time that China had ever established such a high-level can help Germany in its relationship with China; inter-governmental negotiation mechanism with an EU empower the European External Action Service member state – an extraordinary expression of Germany’s (EEAS) to co-ordinate a “top-down” approach importance to it. In short, Germany is now by far the biggest to China policy; and explore new formats for European player in China. dealing with China. Against the background of the euro crisis, many are now wondering whether a “German Europe” is emerging. 2 ECFR/55 May 2012 www.ecfr.eu CHINA AND GERMANY: WHY THE EMERGING SPECIAL RELATIONSHIP MATTERS FOR EUROPE The Chinese-Germansymbiosis Whether or not it is accurate, the perception that Germany is 3 2  1  The Federal Republic always used economic rather than than rather economic used always Republic Federal The The background to the evolving economic relationship relationship economic evolving the to background The The upgrading of Germany’s relationship with China comes China with relationship Germany’s of upgrading The China with relationship special emerging Germany’s Thus Partly as a result of this structural change in the economy, economy, the in change structural this of result a as Partly at a time when Europe is beginning – and struggling – to to – struggling and – beginning is Europe when time a at particularly – partners external with relations on impact an On the other hand, there is a danger that Germany could could Germany that danger a is there hand, other the On and today nearly half of GDP comes from exports. In the the In exports. from comes GDP of half nearly today and German foreign policy is now also increasingly driven by by driven increasingly also now is policy foreign German China in February – in between the European summit and summit European the between in – February in China German power. It may be that, as a result, the Chinese are Chinese the result, a as that, be may It power. German China, which is closely following the debate in Europe about government of Chancellor Gerhard Schröder. As Germany Germany As Schröder. Gerhard Chancellor of government economic interests and, above all, by the needs of exporters. clearer definition of the EU’s common interests and how how and interests a common on EU’s the based of definition China clearer to approach strategic more a develop government-to-government its consultation with China. Chancellor ’s visit held to Germany as even economic interestsratherthanEurope’sstrategicinterests. decade since the creation of the euro, Germany’s economy economy Germany’s euro, the of creation the since decade periphery European the to initially – exports on dependent currency single the of creation the after competitiveness on foreigndemandforitsgrowth”. exports from come has decade past the in growth GDP of now the most powerful country in the EU may also be having military means to achieve its foreign-policy goals and was was and goals foreign-policy its achieve to means military may havereplacedBrusselsinBeijing. to pursue them. pursue to the EU–China summit – led some to wonder whether Berlin the Lisbon Treaty. Last year, the EU–China summit was was summit EU–China the by year, Last created Treaty. Lisbon institutions the foreign-policy the through than the German economy that began under the “red-green” “red-green” the under began that economy German the is both an opportunity and a danger for the rest of Europe. of rest the for danger a and opportunity an both is rather Germany through Europe with dealing increasingly it would otherwise have and thus benefit Europe as a whole. a as Europe benefit thus and have otherwise would it than leverage greater Europe give may China in investment in 1999, the German economy became more and more more and more became economy German the 1999, in has become, as Simon Tilford has put it, “structurally reliant postponed due to internal crisis meetings over the euro euro the over meetings crisis internal to due postponed use its bilateral relationship with China to pursue its own own its pursue to China with relationship bilateral its use undertook difficult structural reforms to improve improve to reforms structural difficult undertook but increasingly also to Asia and above all China. Two-thirds in shift structural the is Germany and China between  available athttp://ecfr.3cdn.net/532cd91d0b5c9699ad_ozm6b9bz4.pdf. Audit ofEU–ChinaRelations”,EuropeanCouncil onForeignRelations,April2009, On astrategicapproachtoChina,seeJohnFox andFrançoisGodement,“APower twq11summerkundnani.pdf. 34:3, Summer2011,pp. 31–45,availableathttp://csis.org/files/publication/ See HansKundnani,“Germanyasageo-economic power”, pdf/2011/essay_euro_tilford_14sept10-196.pdf. p. 3,availableathttp://www.cer.org.uk/sites/default/files/publications/attachments/ Simon Tilford,“Howtosavetheeuro”,Centre forEuropeanReform,September2010, 1 On the one hand, the scale of Germany’s Germany’s of scale the hand, one the On 2

Washington Quarterly, 3

At present, there is an almost perfect symbiosis between the According to the Italian bank UniCredit, exports to China China to exports UniCredit, bank Italian the to According 5  4  01 te qiaet f 1 billion. €13 of equivalent the – 2011 the of result the itself – China from demand fact, In 2008. (China is now the biggest market for the Mercedes S-Class) Mercedes the for market biggest the now is (China on dependent increasingly are companies German Europe, This economic focus is particularly evident in German German in evident particularly is focus economic This The economic relationship between China and Germany Germany and China between relationship economic The Republic in 1972, West Germany had become China’s China’s become had Germany West 1972, in Republic a result, German foreign policy has been increasingly in in increasingly been has policy foreign German result, a all, security and rehabilitation. With the end of the Cold War, and Chinese companies want German machinery. Chinese Chinese machinery. German want companies Chinese and and Germany needs markets. “We have exactly the products German foreign policy also pursued political goals – above – goals political pursued also policy foreign German Chinese and German economies: China needs technology technology needs China economies: German and Chinese gradually in the 1990s and dramatically in the 2000s. In In 2000s. the in dramatically and 1990s the in gradually established between the Federal Republic and the People’s the and Republic Federal the between established economy” – and therefore see it as more useful to them – them to useful more as it see therefore and – economy” cars as such products German high-end want consumers emerging economiesandaboveallChinaforgrowth. German for market and exports) German of percent (10 France behind exports, third-largest the it making exports, currently amount to just under 7 percent of Germany’s total order to deepen trade ties with China, Chancellor Schröder Chancellor China, with ties trade deepen to order officials say they see Germany as having a stronger “real “real stronger a having as Germany see they say officials contributed 0.5 percentage points to German growth in in growth German to points percentage 0.5 contributed while globalisation and the costs of German reunification reunification German of costs the and globalisation while with other Europeans too but there is limited potential”, potential”, limited is there but too Europeans other with never completed). made a point of visiting China at least once a year in order in year a once least at China visiting of point a made led However, Europe. in partner trading important most major factor in the rapid recovery of the German economy. German the of recovery rapid the in factor major to promote German businesses. German promote to reunification, before But power”. “civilian a as seen thus than other member states such as the United Kingdom that Kingdom United the as such states member other than Chinese particular, In official. German one says need”, they in slowed has demand as But percent). (7 States United the in industries that China regards as strategically important important strategically as regards China that industries in such asautomobiles,renewables andhigh-technology. says one Chinese official. In particular, Germany is involved have put the German economy under greater pressure. As As pressure. greater under economy German the put have lifted were Germany on constraints political the however, have largely abandoned manufacturing. “We want to work work to want “We manufacturing. abandoned largely have has intensified even further since the economic crisis of of crisis economic the since further even intensified has policy towards China. Even before diplomatic relations were pursuit ofeconomicratherthanpoliticalgoals. levitation railway line in Shanghai (although the project was Siemens and ThyssenKrupp to build a high-speed magnetic high-speed a build to ThyssenKrupp and Siemens four trillion yuan ($586 billion) Chinese stimulus – was a was – stimulus Chinese billion) ($586 yuan trillion four by companies such as BASF and Volkswagen, trade grew grew trade Volkswagen, and BASF as such companies by big contracts, including a $1.5 billion project involving involving project billion $1.5 a including contracts, big und Campe,2006),pp.139–40(hereafter,Schröder, Entscheidungen Gerhard Schröder,Entscheidungen.MeinLebeninderPolitik (Hamburg:Hoffmann Gfl5A%3D&EXT=pdf. docs_2012_125939.ashx?KEY=C814QI31EjqIm_1zIJDBJGvd-rOCUpzh2jykB- available athttps://www.research.unicreditgroup.eu/DocsKey/economics_ UniCredit EconomicsResearch,Weekly Focus,No.12,12April2012, 4 This led to a number of of number a to led This 5 Exports to China China to Exports ). However, this overlap between the sectors of the economy improvements in the future as China increasingly needs in which Germany excels and the sectors in which China to protect its own companies. Rürup and Heilmann argue wants to excel in the future also means that there is potential that although Chinese companies will be increasingly for conflict as well as co-operation between China and competitive, “the fear that some in Germany have of an Germany. In particular, as its companies move up the value excessive dependence on China are exaggerated”.8 chain, China will increasingly provide competition as well as a market for German exporters, both in China itself and in third markets. In fact, as Bert Rürup and Dirk Heilmann Germany’s approach to China have recently pointed out, “Germany is providing emerging economies with exactly the type of products that they need Germany’s approach to China is influenced by Ostpolitik, in order to build up the capacity to compete with German particularly among Social Democrats. ’s companies around the world”.6 realist, “anti-ideological” approach to the division of Germany and Europe was based on the idea of “Wandel Competition is likely to be particularly fierce in business- durch Annäherung”, or “change through rapprochement”, to-business sectors. The recent collapse of the Berlin-based that Egon Bahr had developed in 1963.9 In order to achieve company Q-Cells – just a few years ago the world’s largest German reunification as the culmination of a long-term manufacturer of solar cells – illustrates the potential threat process of “small steps”, Bahr sought détente with the to German manufacturing from Chinese rivals. But there is Soviet Union through foreign trade and the “weaving” of also likely to be competition in mass market business-to- political, economic and cultural ties between West and East consumer sectors such as the automobile industry where Germany. The Ostpolitik is seen in Germany as one of the brands such as Volkswagen are strong but will in the Federal Republic’s big foreign-policy successes – a decisive next 10 years face increasing competition from Chinese and distinctively West German contribution to the end companies that are either state-owned or state-supported of the Cold War. The lesson for future policy was that, as – for example, on electric cars, where there are particularly Stephen Szabo puts it, “dialogue, diplomacy, mutual trust stringent criteria for technology transfer as a requirement and multilateralism were the best approaches for dealing for producing in China.7 In the medium term, German with seemingly intractable opponents”.10 companies could as a result be pushed further into luxury niches. At least since Schröder, Germany’s approach to China has been based on the idea that the best way to transform The conflict over access to Chinese rare earths in 2010 may it is through trade – “Wandel durch Handel”, or “change also be a sign of things to come. Germany imports between through trade”. The hope is that, as Schröder put it, 3,000 and 5,000 tonnes of the 17 elements known as rare “economic exchange” would lead to “societal change”.11 Thus earths that are vital for the production of high-tech products, Germans, particularly Social Democrats such as Schröder mainly from China. After China reduced its exports of the and Frank-Walter Steinmeier, tend to emphasise co- minerals in 2010, Germany complained to the European operation instead of confrontation with China.12 Leading Commission and the . The EU, Japan and the US are German China experts such as Eberhard Sandschneider also now taking the case to the World Trade Organization. In emphasise “Einbindung”, or integration, and co-operation the meantime, Germany has also taken bilateral steps instead of confrontation.13 As foreign minister, Steinmeier to diversify its supply. In particular, it signed bilateral proposed a Verantwortungsgemeinschaft, or “community agreements with Mongolia in 2011 and Kazakhstan in of responsibility” – a kind of German version of World Bank 2012 to secure access to rare earths. (Since 2010, however, President Robert Zoellick’s idea of China as a “responsible demand for rare earths has fallen and Chinese export quotas stakeholder”. have not been fulfilled.) In the context of this approach – what one might call However, despite this likelihood of greater competition Fernostpolitik – Germany also tends to take a low-key and the potential for conflict over access to raw materials, approach to human rights. Although Germany has a German companies are surprisingly optimistic about their bilateral human rights dialogue with China like other future in China. They think the market is growing enough to accommodate Chinese competitors. They continue to complain about involuntary technology transfer through enforced joint ventures and about the lack of market access 8 Rürup and Heilmann, Fette Jahre, p. 101. 9 On Ostpolitik as an “anti-ideological” approach, see Gordon A. Craig, “Did but say there have been improvements in intellectual Ostpolitik work?” Foreign Affairs, January/February 1994, available at http://www. foreignaffairs.com/articles/49450/gordon-a-craig/did-ostpolitik-work. property rights in China and that there will be further 10 Stephen F. Szabo, “Can Berlin and Washington Agree on Russia?”, the Washington Quarterly, 32:4, October 2009, p. 24, available at http://www.gmfus.org/wp- content/files 11 Schröder, Entscheidungen, p. 141. 12 See, for example, Gerhard Schröder, “Warum wir Peking brauchen”, 27 July 2009, available at http://www.zeit.de/2008/30/China; Frank-Walter Steinmeier, “Was wir uns von China wünschen”, Frankfurter Allgemeine Zeitung, 28 July 2008, available 6 Bert Rürup and Dirk Heilmann, Fette Jahre. Warum Deutschland eine glänzende at http://www.faz.net/themenarchiv/sport/olympia-2008/sportpolitik/gastbeitrag- Zukunft hat (Munich: Carl Hanser Verlag, 2012), p. 98 (hereafter, Rürup and was-wir-uns-von-china-wuenschen-1664308.html. Heilmann, Fette Jahre). 13 See, for example, Eberhard Sandschneider, “Gestaltungsmacht China. Mit 7 Goldman Sachs Portfolio Strategy Research, “China: An opportunity and a competitive Kooperation statt Konfrontation zur Ko-Evolution”, Internationale Politik, March/ threat”, 4 May 2011. April 2012 (hereafter, Sandschneider, “Gestaltungsmacht China”). 3 4 ECFR/55 May 2012 www.ecfr.eu CHINA AND GERMANY: WHY THE EMERGING SPECIAL RELATIONSHIP MATTERS FOR EUROPE “one China policy” than in the past, which the Chinese state Chinese the which past, the in than policy” China “one At the same time, however, human rights issues resonate in resonate issues rights human however, time, same the At When Merkel took over from Schröder in 2005, she initially Walter Steinmeier sought to bring the standoff with China with standoff the bring to sought Steinmeier Walter Yiwu have also settled in Germany and become well-known become and Germany in settled also have Yiwu 19  18  17  16  15  14  The dialogue began in 1999 under Schröder, who saw it it saw who Schröder, under 1999 in began dialogue The Liu Xiaobo. Liu and officials say that she “has understood”, become “more become understood”, “has she that say officials and toned have to Germany and China both in many to appears and did, Schröder as year, a once China visits now Merkel Germany’s own experience of totalitarianism. The German The totalitarianism. of experience own Germany’s Germany – especially freedom of speech, perhaps because of viewed less favourably in Germany than in France, Spain France, in than Germany in favourably less viewed as a more “patient” approach to human rights in China China in rights human to approach “patient” more a as Chinese territory” – a more precise statement of Germany’s of statement precise more a – territory” Chinese aeu” n nw kos hr te e lns are”. lines red the where “knows now and careful” analysts Chinese rights. human on criticism public down called called or the UK. the or counterpart on the issue of Tibet. It has been reported that, reported been has It Tibet. of issue the on counterpart counterpart, the State Council’s Legislative Affairs Office. Office. Affairs Legislative Council’s State the counterpart, raise caseswiththeChinesegovernment. rights in China puts pressure on the German government to media has an “intense focus” on issues such as Tibet and and Tibet as such issues on focus” “intense an has media media sawasadiplomaticvictory. member states, the main focus of its approach is the so- the is approach its of focus main the states, member measures”. they can push China to incrementally reform – in effect, a effect, in – reform incrementally to China push can they by and development, economic for necessary is it think they because discuss to willing more are Chinese the that to an end by sending a confidential letter to his Chinese Chinese his to letter confidential a sending by end an to relations in crisis a to led which 2007, in chancellery the in Lama Dalai the received she example, For had. he than stealth approachtohumanrights. skilful behind-the-scenes diplomacy, German officials think in the letter, Steinmeier recognised that Tibet was “part of “part was Tibet that recognised Steinmeier letter, the in issues rights human on emphasis greater place to seemed human rights and cases such as those of Ai Weiwei and and Weiwei Ai of those as such cases and rights human particular, they welcome the German focus on the rule of of rule the on focus German the welcome they particular, law”, between the German justice ministry and its Chinese its and ministry justice German the between law”, figures. ewe Biig n Bri. oeg Mnse Frank- Minister Foreign Berlin. and Beijing between based on “persistent communication” rather than “punitive than rather communication” “persistent on based com/2011/08/11/world/asia/11iht-letter11.html?pagewanted=all. History”, NewYorkTimes See DidiKirstenTatlow,“ChineseArtistsDrawn toBerlin,aHavenThatReveres of ChinainsixqualityGermannewspapersand newsmagazinesin2008. TXT_20110606_Media_Study_Summary-CR.pdf. Thereportexaminedthecoverage language summaryofthereportisavailableathttp://www.boell.de/downloads/ boell.de/downloads/Endf_Studie_China-Berichterstattung.pdf. AnEnglish- deutschen Medien”,HeinrichBöllStiftung,June2010,availableathttp://www. See CarolaRichterandSebastianGebauer,“DieChina-Berichterstattunginden Unless statedotherwise, quotesarefrominterviewswiththeauthors. as-global-superpower/. 2011, availableathttp://www.pewglobal.org/2011/07/13/china-seen-overtaking-us- “China SeenOvertakingUSasGlobalSuperpower”, PewResearchCenter,13July Schröder, Entscheidungen html. available athttp://www.seiten.faz-archiv.de/faz/20080126/fd2200801261546704. “Chinas Regierunglässtjubeln”, Rechtsstaatsdialog 17 This popular awareness of, and interest in, of,andinteresthuman Thispopularawareness 16 14 Several prominent Chinese exiles such as Liao as such exiles Chinese prominent Several 15 By focusing on issues such as commercial law commercial as such issues on focusing By Probably in part as a result of this, China is is China this, of result a as part in Probably , 10August2011,availableathttp://www.nytimes. , p.143. Frankfurter AllgemeineZeitung,26January2008, , or “dialogue on the rule of of rule the on “dialogue or , 18

19 19 In In Above all, however, the Chinese see Germany as the country Xiaobo. War IIseemtoinfluencethewayChineseseeGermany. War can work towards China in a globalised post-Cold War post-Cold globalised a in China towards work can War 20 22 21  The question is whether an approach that worked towards worked that approach an whether is question The Thus China aims to become a hub for high-tech innovation high-tech for hub a become to aims China Thus In fact, the idea of “Wandel durch Handel” could be simply be could Handel” durch “Wandel of idea the fact, In China’s approachtoGermany Beijing in February. Marx). While Germany’s history is often seen as a burden in Karl with officials, Party Communist for (and, automobiles and green growth. In particular, China aims to develop its its develop to aims China particular, In growth. green and domestic increase to committed China spring, last agreed Rebellion, Boxer the of suppression the in part century took nineteenth and late the in China in territory acquire a way to justify doing business with China. Indeed, it may may it Indeed, China. with business doing justify to way a as Mo Shaoping, a human rights lawyer who represents Liu represents who lawyer rights human a Shaoping, Mo as years, China has been remarkably successful in combining combining in successful remarkably been has China years, Germany is viewed remarkably positively in China, where where China, in positively remarkably viewed is Germany Germany. Nor does Germany’s alliance with Japan in World China isinfactcleverlymanipulatingGermany. criticise her for neglecting human rights on her trip to to trip her on rights human neglecting for her criticise could lead to political liberalisation could be naïve, as some as naïve, be could liberalisation political to lead could political authoritarian an with liberalisation economic development in order to stimulate indigenous innovation. innovation. indigenous stimulate to order in development from shielded industries strategic develop consumption, was which Plan, Five-Year twelfth its In development. world because it is not widely perceived as a former colonial world in which power is shifting from West to East. China East. to West from shifting is power which in world the West, it is actually a source of soft power elsewhere in the that can help them move to the next stage of their economic of perceptions Chinese of part form to seem not does this today is not the Soviet Union in the 1970s. During the last 30 Cold the during détente of context the in Union Soviet the it is in order to satisfy journalists and public opinion. In In opinion. public and journalists satisfy to order in is it in Germany such as have suggested. have Klaeden von Eckart as such Germany in it is associated above all with high-quality products such as such products high-quality with all above associated is it so far as Germany continues to raise human rights issues, issues, rights human raise to continues Germany as far so system. In this context, the idea that further trade with China particular, some experts on German human rights policy policy rights human German on experts some particular, power like France and the UK are. Although Germany did did Germany Although are. UK the and France like power law rather than human rights abuses. They believe that, in that, believe They abuses. rights human than rather law prevented her from meeting with critics of the regime such regime the of critics with meeting from her prevented foreign competition, and increase spending on research and be that rather than Germany cleverly manipulating China, China, manipulating cleverly Germany than rather that be   2009, availableathttp://www.zeit.de/2008/31/Op-ed-31. Eckart vonKlaeden,“So wirdChinakeinelupenreineDemokratie”, das-parlament.de/2012/10/Beilage/007.html. Außenpolitik”, nicht nurProduktefordern:Demokratieund Menschenrechteinderdeutschen See, forexample,MarkusBöckenfördeandJulia Leininger,“Prozessefördern, regimekritikern-1.1274949. affront-bei-merkel-besuch-in-china-peking-verhindert-treffen-der-kanzlerin-mit- Zeitung, 3February2012,availableathttp://www.sueddeutsche.de/politik/ “Peking verhindertTreffenderKanzlerinmit Regimekritikern”, 21 Aus PolitikundZeitgeschichte,No.10,2012,availableathttp://www. 20 For example, the Chinese government Süddeutsche Die Zeit,28July 22

own brands rather than producing for foreign companies began after the rejection of the European constitution in so that it moves up the value chain and retains more of the France and the in 2005.27 Since then, China has profits from production. focused its attention on member states rather than the EU institutions while paying lip service to the new institutions In this context, the Chinese see the German economy in created by the Lisbon Treaty. general and its manufacturing industry in particular as especially useful to them. Chinese officials like to talk The euro crisis seems to have led to an increased about a “win-win” relationship between two countries Chinese focus on Germany in particular. Above all, it has whose economies are “complementary” and there is much strengthened Chinese-German co-operation on economic talk of even closer co-operation in the future around green issues. “It is better to have co-operation with Germany than technologies such as electric cars.23 Chinese think-tanks to pay money to other countries that have problems with are studying the German social market economy (which, their real economies,” says one Chinese analyst. Although although it was a creation of the centre-right Christian there were high hopes that China might invest in southern Democrats, some see as related to their own “socialist European government bonds or the European Financial market economy”) and German labour relations to see if Stability Facility (EFSF), the evidence suggests that the risk- they can learn from them. They are also co-operating with averse Chinese are primarily buying more secure German Germany on a “vocational training alliance”, which helps debt.28 This has helped drive Berlin’s borrowing costs to German companies that increasingly need skilled labour for record lows.29 manufacturing in China. China’s increased focus on Germany may also be a China also wants to invest in German companies as part pragmatic response to a perceived shift in the balance of of the next phase of its “going-out” strategy. For example, power within Europe as a result of the crisis, which some earlier this year Sany, a Chinese construction group, Chinese analysts say they see as a “new start” for relations acquired Putzmeister, a medium-sized German company between China and Europe. Against the background of the that makes high-tech concrete pumps, for €360 million.24 crisis, Chinese officials and analysts see a Germany that is Such acquisitions may become more common in the future. increasingly powerful, a France that is weakened, and a UK “They are buying the backbone of German innovative that is marginalised. They therefore see Germany playing capability”, says one German official. However, while an increasingly decisive role in EU decision-making and some in Europe fear such Chinese investments, which have therefore feel they have little choice but to approach Europe increased since the euro crisis began, Germany remains through Germany. “If you want something done in opposed to protectionist measures.25 For example, it rejected you go to Berlin,” says one Chinese official. a European Commission proposal for a vetting system for foreign investments. Some in Germany, particularly in the However, China could also be increasingly focusing economics ministry, do not support reciprocity as a guiding on Germany in part because it sees Germany as being principle for European policy. Chinese analysts and officials increasingly dependent on it for economic growth. Chinese say that Germany’s export-driven economy means it will not analysts and officials point out that the German economy succumb to protectionism. would not have bounced back after 2009 without it; according to one influential Chinese analyst, China is China’s upgrade of bilateral relations with Germany should now “indispensable” to Germany. Thus, when they look at be seen in the context of this increased economic co- Germany, the Chinese see two long-term developments: operation between the two countries. Wen Jiabao is thought increased German power within the EU and increased to be particularly keen to institutionalise the government- German dependence on China. This makes Germany a to-government consultation before the new Chinese particularly attractive partner for China. leadership takes over in November.26 This intensification of the bilateral relationship with Germany seems to be part of a longer-term shift by China away from the supranational to the intergovernmental level in its approach to Europe that

23 See, for example, Wen Jiabao’s speech at the Chinese-German Forum for Economic and Technological Cooperation, 29 June 2010, available at http://www.gov.cn/ 27 See Nele Noesselt, “Strategiewechsel in der chinesischen Europapolitik: Umweg misc/2011-06/29/content_1895991.htm. über Deutschland?”, German Institute for Global and Area Studies, 2011, available 24 See Chris Bryant, “China’s Sany to acquire Putzmeister”, Financial Times, 30 at http://www.giga-hamburg.de/dl/download.php?d=/content/publikationen/ January 2012, available at http://www.ft.com/cms/s/0/7aecad0a-4a5e-11e1-a11e- pdf/gf_asien_1106.pdf (hereafter, Noesselt, “Strategiewechsel in der chinesischen 00144feabdc0.html#axzz1sCghtZFz. Europapolitik”). 25 On Chinese investment in Europe since the euro crisis, see François Godement and 28 See Keith Bradsher, “China Signals Reluctance to Rescue EU”, New York Times, 4 Jonas Parello-Plesner with Alice Richard, “The Scramble for Europe”, European December 2011, available at http://www.nytimes.com/2011/12/05/business/global/ Council on Foreign Relations, July 2011, available at http://www.ecfr.eu/page/-/ china-signals-reluctance-to-rescue-eu.html. ECFR37_Scramble_For_Europe_AW_v4.pdf. 29 See Paul Geitner, “China, Amid Uncertainty at Home and in Europe, Looks to 26  On the Chinese thinking behind the government-to-government consultation, Germany”, New York Times, 22 April 2012, available at http://www.nytimes. see Wen’s speech at the Chinese-German Forum for Economic and Technological com/2012/04/23/business/global/china-invests-in-germany-amid-uncertainty. Cooperation, 29 June 2010. html?pagewanted=all. 5 6 ECFR/55 May 2012 www.ecfr.eu CHINA AND GERMANY: WHY THE EMERGING SPECIAL RELATIONSHIP MATTERS FOR EUROPE “actively support” China’s bid for market economic status status economic market for bid China’s support” “actively The post-crisisalignment 31 30  2010 that “anybody who believes China is a problem has to has problem a is China believes who “anybody that 2010 The Chinese and German approach to the crisis has led led has crisis the to approach German and Chinese The The bilateral relationship between China and Germany also Germany and China between relationship bilateral The They said that they shared important interests as the third- the as interests important shared they that said They Thus there seems to have been what one might call a post- a call might one what been have to seems there Thus US plans to limit current account surpluses. Nobel Prize- Nobel surpluses. account current limit to plans US Based on these similarities, China and Germany have also also have Germany and China similarities, these on Based ahead of Germany; they have massive surpluses of saving saving of surpluses massive have they Germany; of ahead now China with manufactures, of exporters largest “the are appears to have been strengthened by the way that, since the t ie drn te at e yas perd o use a pursue to appeared years few last the during times at value to the “real economy”. Germany also promised to to promised also Germany economy”. “real the to value and fourth-largest economies in the world and as important among Chinese analysts and officials for the German German the for officials and analysts Chinese among that policy a – borrowing irresponsible stop to wanted also China and Germany also share a desire to reform financial reform to desire a share also Germany and China easing as a tool to reduce the crisis. Conversely, at the G20 the at Conversely, crisis. the reduce to tool a as easing development, there are structural similarities between between similarities structural are there development, economy. This is in itself a result of shared economic economic shared of result a itself in is This economy. over investment;andtheyhavehugetradesurpluses”. communiqué in 2010 on their own bilateral “strategic “strategic bilateral own their on 2010 in communiqué crisis alignmentbetweenChinaandGermany. economic model and for Germany’s approach to fiscal policy. sympathy considerable rectify is to There pressure imbalances. resisted economic and pressure deflationary overcome the international financial and economic crisis. economic and financial international the overcome winning economist Joseph Stiglitz said in an interview in in interview an in said Stiglitz Joseph economist winning markets and global economic governance. In a joint joint a In governance. economic global and markets the US. Both countries have been critical of quantitative quantitative of critical been have countries Both US. the their economies. As Martin Wolf pointed out in 2010, they 2010, in out pointed Wolf Martin As economies. their the opposite side to the US – in debates about the global global the about debates in – US the to side opposite the through the EU, although it has not yet taken any specific specific any taken yet not has it although EU, the through trade and export countries, and in particular attached great attached particular in and countries, export and trade they have encouraged their customers to keep buying but but buying keep to customers their encouraged have they in particular to disagreements between both of them and and them of both between disagreements to particular in in the international system. Despite the huge differences differences huge the Despite system. international the in play they roles analogous somewhat the on based interests steps todoso. summit in Seoul in 2010, both China and Germany opposed in 2004, China and Germany said that their relationship relationship their that said Germany and China 2004, in that argues Wolf policy. macroeconomic similar somewhat have found themselves on the same side as each other – and he regards as “incoherent”. They have both also exerted exerted also both have They “incoherent”. as regards he had been strengthened through the result of attempts to to attempts of result the through strengthened been had partnership”, which was created under Schröder and Wen Wen and Schröder under created was which partnership”, between China and Germany in terms of demography and and demography of terms in Germany and China between countries two the 2008, in crisis financial the of beginning  chinesisches-kommunique.html. bundesregierung.de/Content/DE/Artikel/2010/07/2010-07-16-deutsch- Deutsch-Chinesisches Kommuniqué,16July 2010,availableathttp://www. 11df-8e6f-00144feabdc0.html. Times, March16,2010,availableathttp://www.ft.com/cms/s/0/cd01f69e-3134- Martin Wolf,“ChinaandGermanyunitetoimpose globaldeflation,” Financial 30

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“pivot” towards Asia. China’s foreign-policy priority is the the is priority foreign-policy China’s Asia. towards “pivot” A strategicrelationshipbetweenChina 34  33 32  (In a sense, Germany may now be more of a “problem” than It is not yet clear whether this alignment between China China between alignment this whether clear yet not is It However, the increasingly close relationship between between relationship close increasingly the However, Beijing and Berlin goes beyond economic interests – or at at or – interests economic beyond goes Berlin and Beijing and Merkel became closer. “We were in a similar situation”, similar a in were “We closer. became Merkel and an undervalued currency to accumulate a trade surplus. trade a accumulate to currency undervalued an China, whose trade surplus fell from its peak of $300 billion China is a rising global power, so Germany is a rising power aligned with its traditional allies again. In addition, much much addition, In again. allies traditional its with aligned increasingly the China as But of above. described function Germany and a part in is It last. will Germany and Chinese analysts say that it was during this period that Wen and the Pacific. However, this strategic competition takes takes competition strategic this However, Pacific. the and announced that the focus of US security strategy would begin Germany as “the China of Europe” because of the way it uses and Germany? context of global developments and in particular the US US the particular in and developments global of context depends on whether China continues to grow and whether and grow to continues China whether on depends could Germany production. industrial in competitive China of economies two the between symbiosis current within Europe. Both have in the past for different reasons reasons different for past the in have Both Europe. within restricted sectors of its economy such as banking and public they are uncomfortable and has led to criticism of both – both of criticism to led has and uncomfortable are they therefore see its economic interests as being more closely closely more being as interests economic its see therefore remain to struggle to continues Germany as countries two to shift away from Europe and the Middle East towards Asia in 2008 to $155 billion last year and is expected to decline to expected is and year last billion $155 to 2008 in in particular by the US – for somewhat similar reasons. reasons. similar somewhat for – US the by particular in it improves intellectual property rights and further opens opens further and rights property intellectual improves it says one. increasing strategic competition with the US, particularly particularly US, the with competition strategic increasing has increased expectations of both countries with which which with countries both of expectations increased has since last November, when President Barack Obama Obama Barack President when November, last since potential for alignment between them. They say that, just as least it does for China. In particular, it has to be seen in the in seen be to has it particular, In China. for does it least procurement inanewphaseofliberalisation. the German between for conflict increasing market be a could there as products, well as competition provides Some Chinese analysts go even further in seeing parallels parallels seeing in further even go analysts Chinese Some further thisyear. believe Germany is a problem”. a is Germany believe between China and Germany – and by extension the the extension by and – Germany and China between been reluctant to lead or take responsibility. But the crisis crisis the But responsibility. take or lead to reluctant been  europe-after-the-crisis. available athttp://www.foreignaffairs.com/articles/137421/andrew-moravcsik/ Andrew Moravcsik,“EuropeAftertheCrisis”, soros-as-exports-drive-record-growth-at-consumers-expense.html. 2010, availableathttp://www.bloomberg.com/news/2010-08-17/germany-ignores- Ignores SorosasExportsBoomatConsumers’ Expense”, Interview on5August2010,quotedinJana Randow andHolgerElfes,“Germany s/0/7e010a5a-8324-11e1-9f9a-00144feab49a.html#axzz1roFUodci. surplus”, Simon RabinovitchandJamilAnderlini,“IMF settorecogniseshrinkingChinese Financial Times,10April2012,available athttp://www.ft.com/cms/ 34 ) 32 Observers continue to see to continue Observers Foreign Affairs,May/June2012, Bloomberg, 18August

33 place in a context of economic interdependence between own. In particular, the Chinese see an overlap between China and the US. The Chinese are increasingly wondering Germany’s reluctance to use military force and their own where Europe fits into this complex picture. principle of non-interference. The most recent example is Germany’s abstention on United Nations Security Council China has for a long time wanted a multipolar world in Resolution 1973 on the use of military force in Libya. China which US power is limited by the emergence of other welcomed Germany’s abstention, although Chinese analysts power centres. Europe plays a key role in Chinese thinking and officials recognise that Germany opposed the use of about multipolarity.35 Unlike the US, which has military military force for different reasons than China. commitments to, and bases in, China’s neighbouring countries, Europe does not aspire to be a military actor in Although many German officials see Libya as a one-off, Asia. Thus China does not see the potential for strategic Chinese analysts and officials see German preferences on competition with Europe and sees the relationship as being the use of military force in general as being aligned with their a “win-win” one. China has therefore supported European own. They say that, as exporters, both China and Germany integration in the hope that it would create a strong Europe want above all to avoid conflict. “We share a realistic view of that could be a counterweight to American power. In short, the world”, says one Chinese official. “We have a common it seeks to undermine the idea of the West. interest in keeping the peace”, says an analyst. In other words, they do not see Germany as being implicated in the Europe in general and Germany in particular have economic “new imperialism” of France, the UK and the US.39 Thus the interests in China. But Europe also has wider strategic Chinese may increasingly see Germany as their most reliable interests – such as global governance, non-proliferation partner in the West, not just on economic issues but also on and regional security – which it pursues above all through strategic issues. In that context, they may see strengthening the Atlantic alliance. This means that, although Europe in Germany as a way to split the West. general shares China’s view that there is no real strategic competition between them, it nevertheless often sides with A crucial strategic issue from China’s point of view is Taiwan. the US in disputes with China, particularly on security China supported German unification and consequently issues. For example, the EU did not ultimately lift the arms expects Germany to support China’s desire for reunification embargo, notwithstanding calls to do so by Chancellor – that is, the return of Taiwan to the People’s Republic of Schröder and French President in 2004. China – in return. Chinese officials note that West Germany This disappointed China, which wants a Europe that is under Chancellor Konrad Adenauer did not follow the US independent of the US and willing to challenge it on issues in establishing diplomatic relations with Taiwan. Even with such as this. the current rapprochement between China and Taiwan, the fundamental situation remains unresolved and the US The danger for Europe is that its increasing economic still maintains a legal commitment to supply Taiwan with dependence on China could undermine these strategic sufficient defensive capabilities. Like the rest of the EU, interests and in particular the possibility of what has been Germany believes in a peaceful resolution of the Taiwan called “transatlantic globalism”.36 Whether this danger issue based on the “one China” principle. China would hope becomes a reality will depend to a large extent on what type that, in the unlikely event of a conflict with the US over of multipolar order emerges in the world. Some German Taiwan, Germany would remain neutral or even support China experts such as Eberhard Sandschneider argue that China’s legal claims over Taiwan. Europe should accept the shift to a multipolar order and accommodate China.37 But although Europe and China may The question, from the Chinese point of view, is whether share a desire for a “G3 world”, Europeans have in mind a Germany can bring the rest of Europe along with it on this world of rule-bound global governance rather than spheres and other issues. Although Chinese analysts and officials of influence.38 In that sense, they should reject the Chinese see Germany becoming more powerful within Europe, they vision of multipolarity. also realise that other big member states such as France and, to a lesser extent, the UK remain important. For example, In this larger strategic context, the Chinese may see Germany while China welcomed Germany’s abstention on Resolution as the key player in getting the kind of Europe – and the 1973, Germany was not able to bring France along with it. In kind of multipolarity – they want. This is partly because of that sense, Libya was a failure of the kind of German Europe the perception of increasing German power within Europe that China wants to see. Thus, while China is upgrading and increasing dependence on China, but also because of its bilateral relationship, it knows it may also need other a perception that German preferences are closer to their member states. For example, it recently held a summit with Eastern European countries in . 40

35 See Noesselt, “Strategiewechsel in der chinesischen Europapolitik”, p. 4. 36 On “transatlantic globalism”, see Richard Youngs, Europe’s Decline and Fall. The 39 On Chinese perception of a “new imperialism”, see David Shambaugh, “Coping with Struggle Against Global Irrelevance (London: Profile Books, 2010), pp. 36–7. a Conflicted China”, Washington Quarterly, 34:1, Winter 2011, p. 11, available at 37 See Sandschneider, “Gestaltungsmacht China”. https://csis.org/files/publication/twq11wintershambaugh.pdf. 38 See Parag Khanna and Mark Leonard, “Why China Wants a G3 World”, New York 40 See François Godement, “China and New Europe”, European Council on Foreign Times, 7 September 2011, available at http://www.nytimes.com/2011/09/08/ Relations, 30 April 2012, available at http://ecfr.eu/content/entry/commentary_ opinion/08iht-edkhanna08.html?_r=1&pagewanted=all. china_and_new_europe 7 8 ECFR/55 May 2012 www.ecfr.eu CHINA AND GERMANY: WHY THE EMERGING SPECIAL RELATIONSHIP MATTERS FOR EUROPE A realEuropean“strategicpartnership” What Germany wants is a comprehensive China policy policy China comprehensive a is wants Germany What with China 41  In fact, because of the economic importance of its its of importance economic the of because fact, In any member state to develop a European strategic approach approach to China across a range of areas including foreign including areas of range a across China to approach and pursue key European interests and make full use of of use full make and interests European key pursue and a German official. “In the long term, however successful successful however term, long the “In official. German a idea the dispel to interest their in therefore is it say and as a market for German exports. “Don’t they see the bigger the see they “Don’t exports. German for market a as Nevertheless, Wen. with meetings recent in Syria and the to responds Germany how on depends now Much Catherine Ashton asking her to develop a “sustainable “sustainable a develop to her asking Ashton Representative High Catherine to letter a sent Westerwelle Guido China, even it does not have sufficient weight on its own to own its on weight sufficient have not does it even China, states member other with relations German for China officials German European. remain instincts Germany’s China is thinking more strategically about the emerging emerging the about strategically more thinking is China China. There is a danger that, as Germany focuses above all above focuses Germany as that, danger a is There China. policy foreign its in goals economic of pursuit Germany’s German alignment. strategic a of perception Chinese concept” for relations with the EU’s “strategic partners”. In partners”. “strategic EU’s the with relations for concept” consequences of developing the bilateral relationship with with relationship bilateral the developing of consequences of a new European approach in December 2010, there has there 2010, December in approach European new a of on its economic relationship with China, it could overlook overlook could it China, with relationship economic its on Iran as such issues raised Merkel that out point officials relationship with China, Germany was keener than almost almost than keener was Germany China, with relationship world’s populationby2025. ministry foreign German a as fact, In small.” we’re are, we member states. outline an delivered Ashton although However, materials. Minister Foreign German 2010, November in meeting member states and the EU institutions in order to identify to order in institutions EU the and states member multipolar world, Germany seems above all to see China China see to all above seems Germany world, multipolar makes it prone to strategic parochialism in its approach to approach its in parochialism strategic to prone it makes towards China. In the run-up to the European Council Council European the to run-up the In China. towards that would include more systematic co-operation between between co-operation systematic more include would that that although Germany is the biggest European player in in player European biggest the is Germany although that conscious also are They alone”. it “going is Germany that the broader strategic implications of China’s rise. Whereas rise. China’s of implications strategic broader the influence an emerging superpower with a population of 1.35 the fear Some Europe”. strong “a want they say Beijing in policy, economic questions, climate change, energy and raw particular, Germany urged Ashton to co-ordinate a “holistic” paper notes, Germany will make up only 1 percent of the the of percent 1 only up make will Germany notes, paper picture?” asksoneAmericanofficialinfrustration. been little follow-up by either the EU institutions or by by or institutions EU the either by follow-up little been billion. “In the end we’re 80 million and shrinking,” says says shrinking,” and million 80 we’re end the “In billion. 6D7EF794ED73C97E52312C20BB2F68 publicationFile/165147/120229_Strategie_Europakommunikation.pdf;jsessionid=90 at http://www.auswaertiges-amt.de/cae/servlet/contentblob/610174/ für dieEuropa-Kommunikation2012”,February 2012,p.7,available Auswärtiges Amt,“Europaerklären–Europa diskutierenEinKonzept 41

This is a dangerous situation for both Germany and Europe and Germany both for situation dangerous a is This The perceived failure of the EU in general and Ashton in in Ashton and general in EU the of failure perceived The Lisbon Treaty. In particular, Germany would like to see see to like would Germany particular, In Treaty. Lisbon as a whole. Merkel’s visit to China in February, during which and trade. Indeed, German officials see the “strategic “strategic the see officials German Indeed, trade. and are holding them back. The Germans feel that, for them, them, for that, feel Germans The back. them holding are Representative High the which in approach “top-down” a are invited to meetings and briefings more frequently than frequently more briefings and meetings to invited are as FranceandtheUK,whichfears“competencecreep”. China has led to a sense of frustration among German officials, change climate as such directorates-general Commission Germany’s interests to join a common European approach European common a join to interests Germany’s Germany must not give up on Europe. Nor can its its can Nor Europe. on up give not must Germany get its act together. Thus, on issues affecting its economic economic its affecting issues on Thus, together. act its get earths even though the EU was in the process of elaborating a agreements bilateral own its pursued Germany example, debate about reciprocity. At the same time, however, the rest commitment to a European approach to China remain remain China to approach European a to commitment going of instead briefings and meetings some to delegation of Europe and in particular France and the UK must now now must UK the and France particular in and Europe of who feel that other member states that don’t have a big stake would play a greater role in co-ordinating relevant European with Kazakhstan and Mongolia to diversify its supply of rare with China than with its European partners. relationship. In particular, the EU should do three things. rhetorical. Rather, it should take initiative to actively develop replacing Brussels. German officials in Beijing already seem more energy into developing joint standards for electric cars the stakes are so high that they cannot wait for Europe to to Europe for wait cannot they that high so are stakes the the by provided action for scope institutional improved the to China rather than increasingly pursuing its own special special own its pursuing increasingly than rather China to the to contribute and China to approach strategic EU’s the official German one says us”, for open are doors “The them. and states member other than access be better much have may to Berlin Beijing, in least at that, perception the themselves, but this is opposed by other member states such in theinrelationship, seeorthroughit lessamultifaceted lens, interests, Germany sometimes takes unilateral action. For For action. unilateral takes sometimes Germany interests, in its relationship with China. In particular, they must must they particular, In China. with relationship its in strengthened Europe, of behalf on speak to appeared she in Beijing. The Germans would be prepared to send the EU the send to prepared be would Germans The Beijing. in strategy on raw materials. Germany also seems to be putting particular to develop Europe’s “strategic partnership” with partnership” “strategic Europe’s develop to particular Lisbon the for test crucial a as China with partnership” urgently find ways to help Germany be a good European European good a be Germany help to ways find urgently foreign-policy institutions. fill the “strategic partnership” with content so that it is in in is it that so content with partnership” “strategic the fill Identify where Europe can help Germany Chinese wherever possible. On issues such as Iran or other UN Security Council matters the big three could also be included in The six large member states (France, Germany, , Spain, meetings. Likewise, some of the numerous bilateral dialogues Poland and the UK) and several smaller member states have with China should also be abolished or streamlined so they their own bilateral “strategic partnerships” with China. This feed into a joint European approach. Member states should creates a tension with, and in some ways duplicates, the EU’s also support joint reporting from Beijing by the EU delegation. own “strategic partnership” with China. But it is unrealistic to think that member states, including Germany, will now abandon their bilateral “strategic partnerships” with China. Explore new formats The EU therefore needs to identify exactly where it can bring added value in relations with China in order to develop a However, given the failure of the European approach and clearer and more effective division of labour between the EU German frustration, it may now be necessary to also explore institutions and member states. What issues should be dealt possible new formats for developing policy towards China. In with at the EU level and what issues should member states particular, the EU should think about whether there is a need deal with on their own? In particular, the EU needs to identify for new informal groupings that include some but not all 27 where it can help Germany. member states. Some German officials say that attempting to agree a policy among all 27 member states tends to lead At present, member states, including Germany, focus on to a lowest common denominator policy. It may therefore be business deals with China, while the EU institutions deal with necessary to think pragmatically about a compromise between many of the difficult aspects of the relationship with China, such a European approach that includes all 27 member states and as human rights and trade disputes. This makes it tempting the pursuit by member states of bilateral relationships with for the Chinese not to take the EU seriously and engage less China. The critical question, therefore, is what the “critical with it. However, there are areas where a joint approach would mass” is. The answer may vary from one policy area to another. benefit Germany as well as Europe as a whole. This does not The EU could therefore experiment with new formats in necessarily mean extending Commission competence but narrow, tightly defined areas. rather improving co-ordination among member states. In particular, the EU can bring added weight on economic issues For example, in some cases, particularly Security Council such as investment rules, public procurement and access to matters, it may make sense to try out an EU3 format modelled on raw materials. Similarly, if the EU had a code of conduct on the approach that the EU has successfully used in negotiations Tibet, China would be less able to impose “soft” sanctions on with Iran. Conversely, the big three could also be invited to EU– member states whose leaders met with the Dalai Lama. China summits in order to add their weight to a joint European approach to China. In other cases, policy development could be driven by a caucus of the five to six member states with the Strengthen the role of the EEAS largest economic stake in the relationship with China. In either case, the High Representative would have to play a pivotal role Other member states should also respond to Germany’s in including other member states – as Ashton has on Iran. Such proposal for a comprehensive European approach to an ad hoc approach to China policy would be controversial (“a China. Germany is right to ask for a “top-down” approach. different Europe”, as one German official put it) but it may The European External Action Service (EEAS) should be be a necessary and pragmatic compromise between an EU27 empowered to co-ordinate policymaking on China, preparing approach and bilateralism. issues for EU-China summits and ensuring consistency between different European Commission directorates-general The EU is now at a critical juncture in its relationship with such as climate change and trade. This would require the China. Just as Europe was beginning to develop a more combined efforts of the High Representative and the presidents strategic approach towards China, the euro crisis sharpened of the European Council and European Commission. In turn, competition between member states for Chinese investment. they need an identical and well-prepared platform from which At the same time, against the background of the crisis, China to approach China. The EU-China summit with the presidents is upgrading its bilateral relationship with Germany, which of the Commission and Council would remain the place where it increasingly sees as the dominant player in Europe and this co-ordinated effort is pulled together. one whose economic dependence on China and strategic preferences make it a preferred partner. Germany remains Member states must also support co-ordination of their committed to a more strategic European approach towards own approaches to China. Even large member states such China but is beginning to take a more bilateral approach as France, Germany and the UK now need Europe in order in some areas. The rest of Europe urgently needs to help to have any influence on China. France and the UK should Germany to be a good European by developing a real “strategic therefore give up their opposition to the EEAS, including in partnership” with China before it is too late. Beijing, or risk being cut out of the loop as Germany’s bilateral relationship with China displaces Europe’s embryonic “strategic partnership”. In practice, this means that the EU delegation, rather than member states, should meet with the 9 10 ECFR/55 May 2012 www.ecfr.eu CHINA AND GERMANY: WHY THE EMERGING SPECIAL RELATIONSHIP MATTERS FOR EUROPE About the authors the About oa Parello-Plesner Jonas Utopia or Auschwitz. Germany’s 1968 Generation and the and Generation 1968 Germany’s Auschwitz. or Utopia Holocaust (London/NewYork,2009). Hans Kundnani is editorial director at the European Council Quarterly China’s Janus-faced response to the Arab revolutions European Council on Foreign Relations. Previously, he was he Previously, Relations. Foreign on Council European (with François Godement and Alice Richard, 2011) and and 2011) Richard, Alice and Godement François (with East Asia from 2005–2009. He is also on the editorial board Raffaello Pantucci,2011). and the the and and newspapers including the the including newspapers and magazines various for write to continues and journalist a as director of a development NGO with activities in Asia and and Asia in activities with NGO development a of director on Foreign Relations. He has written about German foreign German about written has He Relations. Foreign on of RÆSON, a Danish international affairs magazine. His His magazine. affairs international Danish a RÆSON, of served as ’s Senior Advisor on China and North North and China on Advisor Senior Denmark’s as served policy for various journals including the the including journals various for policy publications for ECFR include include ECFR for publications Times Literary Supplement Literary Times and Internationale Politik is a Senior Policy Fellow at the the at Fellow Policy Senior a is Guardian Europe for Scramble The . He previously worked . He is the author of of author the is He . , , Statesman New Washington Washington (with Acknowledgements

The authors would like to thank Thomas Koenig for providing invaluable logistical support and in particular for arranging meetings for us in Beijing and Berlin. Our colleagues Olaf Boehnke, Sebastian Dullien, Anthony Dworkin, Konstanty Gebert, François Godement, Jana Kobzova, Mark Leonard, Dick Oosting and Nick Witney read earlier versions of the text and provided very valuable comments. Council members Daniel Daianu, Lykke Friis, Sylvie Kauffmann and Ana Palacio also provided us with helpful feedback. Clemens Kunze helped with research.

We are grateful to Sven Schwersensky of the Friedrich Ebert Stiftung for his help while we were in Beijing. We would also like to thank Julia Coym, Ian Johnson, Roderick Kefferputz, Rasmus Abildgaard Kristensen, Alice Richard, Dirk Schumacher, May-Britt Stumbaum, Stephen Szabo, Gudrun Wacker and Jörg Wüttke for their help. Finally, this brief would not have been possible without the numerous Chinese, German and other European officials, analysts and business people who generously gave us their time and shared their experiences and views.

11 Among members of the European Council on Foreign Relations are John Bruton (Ireland) Hanzade Dog˘an Boyner Heidi Hautala () Former European Commission (Turkey) Minister for International Development former prime ministers, presidents, Ambassador to the USA; former Prime European commissioners, current Chair, Dog˘an Gazetecilik and Dog˘an Minister (Taoiseach) On-line Sasha Havlicek and former parliamentarians and (United Kingdom) ministers, public intellectuals, Ian Buruma (The Netherlands) Andrew Duff (United Kingdom) Executive Director, Institute for Strategic business leaders, activists and Writer and academic Member of the European Parliament Dialogue (ISD) cultural figures from the EU member Erhard Busek () Mikuláš Dzurinda () Steven Heinz (Austria) states and candidate countries. Chairman of the Institute for the Former Foreign Minister Co-Founder & Co-Chairman, Danube and Central Europe Lansdowne Partners Ltd (Germany) Asger Aamund (Denmark) Jerzy Buzek (Poland) Former Finance Minister Annette Heuser (Germany) President and CEO, A. J. Aamund A/S Member of the European Parliament; Executive Director, Bertelsmann and Chairman of Bavarian Nordic A/S former President of the European Rolf Ekeus () Foundation Washington DC Parliament; former Prime Minister Former Executive Chairman, United Urban Ahlin (Sweden) Nations Special Commission on ; Diego Hidalgo (Spain) Deputy Chairman of the Foreign Gunilla Carlsson (Sweden) former OSCE High Commissioner on Co-founder of Spanish newspaper El Affairs Committee and foreign Minister for International Development National Minorities; former Chairman País; Founder and Honorary President, policy spokesperson for the Social Cooperation Stockholm International Peace FRIDE Democratic Party Research Institute, SIPRI Maria Livanos Cattaui Jaap de Hoop Scheffer Martti Ahtisaari (Finland) (Switzerland) Uffe Ellemann-Jensen (The Netherlands) Chairman of the Board, Crisis Former Secretary General of the (Denmark) Former NATO Secretary General Management Initiative; former International Chamber of Commerce Chairman, Baltic Development Forum; President former Foreign Minister Danuta Hübner (Poland) Ipek Cem Taha (Turkey) Member of the European Parliament; Giuliano Amato (Italy) Director of Melak Investments/ Steven Everts (The Netherlands) former European Commissioner Former Prime Minister; Chairman, Journalist Adviser to the Vice President of the Scuola Superiore Sant’Anna; European Commission and EU High Anna Ibrisagic (Sweden) Carmen Chacón (Spain) Member of the European Parliament Chairman, Istituto della Enciclopedia Former Minister of Defence Representative for Foreign and Security Italiana Treccani; Chairman, Centro Policy Studi Americani Jaakko Iloniemi (Finland) Charles Clarke Tanja Fajon (Slovenia) Former Ambassador; former Executive Gustavo de Aristegui (Spain) (United Kingdom) Member of the European Parliament Director, Crisis Management Initiative Diplomat; former Member of Visiting Professor of Politics, University Parliament of East Anglia; former Home Secretary Gianfranco Fini (Italy) Toomas Ilves (Estonia) President, Chamber of Deputies; President Viveca Ax:son Johnson Nicola Clase (Sweden) former Foreign Minister Ambassador to the United Kingdom; Wolfgang Ischinger (Germany) (Sweden) former State Secretary (Germany) Chairman, Munich Security Chairman of Nordstjernan AB Former Foreign Minister and vice- Conference; Global Head of Daniel Cohn-Bendit (Germany) Chancellor Government Affairs Allianz SE Gordon Bajnai () Member of the European Parliament Former Prime Minister Karin Forseke (Sweden/USA) Minna Järvenpää (Finland/US) Robert Cooper Business Leader; former CEO Carnegie International Advocacy Director, Open Dora Bakoyannis (Greece) Society Foundation Member of Parliament; former Foreign (United Kingdom) Investment Bank Minister Counsellor of the European External Action Service Lykke Friis (Denmark) Mary Kaldor (United Kingdom) Leszek Balcerowicz (Poland) Member of Parliament; former Minister Professor, London School of Economics Professor of Economics at the Warsaw Gerhard Cromme (Germany) for Climate, Energy and Gender Ibrahim Kalin (Turkey) School of Economics; former Deputy Chairman of the Supervisory Board, Equality ThyssenKrupp Senior Advisor to the Prime Minister Prime Minister Jaime Gama (Portugal) of Turkey on foreign policy and public diplomacy CHINA AND GERMANY: WHY THE EMERGING SPECIAL RELATIONSHIP FOR MATTERS EUROPE Lluís Bassets (Spain) Maria Cuffaro (Italy) Former Speaker of the Parliament; Deputy Director, El País Maria Cuffaro, Anchorwoman, TG3, former Foreign Minister RAI Sylvie Kauffmann (France) Marek Belka (Poland) Timothy Garton Ash Editorial Director, Le Monde Governor, National Bank of Poland; Daniel Daianu (Romania) (United Kingdom) Olli Kivinen (Finland) former Prime Minister Professor of Economics, National Professor of European Studies, Oxford Writer and columnist School of Political and Administrative University Roland Berger (Germany) Studies (SNSPA); former Finance Ben Knapen (The Netherlands) Founder and Honorary Chairman, Minister Carlos Gaspar (Portugal) Minister for European Affairs and Roland Berger Strategy Consultants Chairman of the Portuguese Institute of International Cooperation GmbH Massimo D’Alema (Italy) International Relations (IPRI) President, Italianieuropei Foundation; Gerald Knaus (Austria) Erik Berglöf (Sweden) President, Foundation for European Teresa Patricio Gouveia Chairman, European Stability Initiative; Chief Economist, European Bank for Progressive Studies; former Prime (Portugal) Carr Center Fellow Reconstruction and Development Minister and Foreign Minister Trustee to the Board of the Calouste Gulbenkian Foundation; former Caio Koch-Weser (Germany) Jan Krzysztof Bielecki (Poland) Marta Dassù (Italy) Foreign Minister Vice Chairman, Deutsche Bank Group; Chairman, Prime Minister’s Economic Under Secretary of State for Foreign former State Secretary Council; former Prime Minister Affairs Heather Grabbe Bassma Kodmani (France) Carl Bildt (Sweden) Ahmet Davutoglu (Turkey) (United Kingdom) Executive Director, Arab Reform Foreign Minister Foreign Minister Executive Director, Open Society Institute – Brussels Initiative Henryka Bochniarz (Poland) Aleš Debeljak (Slovenia) Rem Koolhaas (The President, Polish Confederation of Poet and Cultural Critic Charles Grant (United Kingdom) Private Employers – Lewiatan Director, Centre for European Reform Netherlands) Jean-Luc Dehaene () Architect and urbanist; 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Gianfranco Dell’Alba (Italy) Arab States on Syria. David Koranyi (Hungary) Director, Confindustria Delegation Deputy Director, Dinu Patriciu Eurasia

www.ecfr.eu Ingrid Bonde (Sweden) to Brussels; former Member of the Fernando Andresen Guimarães Center of the Atlantic Council of the CFO & Deputy CEO, Vattenfall AB European Parliament (Portugal) United States Head of the US and Canada Division, Emma Bonino (Italy) Pavol Demeš (Slovakia) European External Action Service Bernard Kouchner (France) Vice President of the Senate; former EU Senior Transatlantic Fellow, German Former Minister of Foreign Affairs Commissioner Marshall Fund of the United States Karl-Theodor zu Guttenberg (Bratislava) Ivan Krastev (Bulgaria) Franziska Brantner (Germany) (Germany) Chair of Board, Centre for Liberal Member of the European Parliament Kemal Dervis (Turkey) Former Defence Minister Strategies Vice-President and Director of István Gyarmati (Hungary) Aleksander Kwas´niewski Han ten Broeke Global Economy and Development, President and CEO, International May 2012 (The Netherlands) Brookings. Centre for Democratic Transition (Poland) Member of Parliament and Former President spokesperson for foreign affairs Tibor Dessewffy (Hungary) Hans Hækkerup (Denmark) and defence President, DEMOS Hungary Mart Laar (Estonia) Former Chairman, Defence Minister of Defence; former Prime Commission; former Defence Minister Minister ECFR/55 12 Miroslav Lajcˇák (Slovakia) Marcelino Oreja Aguirre (Spain) Pierre Schori (Sweden) Deputy Prime Minister and Foreign Member of the Board, Fomento de Chair, Olof Palme Memorial Fund; Minister Construcciones y Contratas; former EU former Director General, FRIDE; former Commissioner SRSG to Cote d’Ivoire Alexander Graf Lambsdorff (Germany) Monica Oriol (Spain) Wolfgang Schüssel (Austria) Member of the European Parliament CEO, Seguriber Member of Parliament; former Chancellor Pascal Lamy (France) Cem Özdemir (Germany) Honorary President, Notre Europe and Leader, Bündnis90/Die Grünen Karel Schwarzenberg Director-General of WTO; former EU (Green Party) (Czech Republic) Commissioner Ana Palacio (Spain) Foreign Minister Bruno Le Maire (France) Former Foreign Minister; former Senior Giuseppe Scognamiglio (Italy) Minister for Food, Agriculture & Fishing President and General Counsel of the Executive Vice President, Head of Public World Bank Group Affairs Department, UniCredit S.p.A Mark Leonard (United Kingdom) Director, European Council on Foreign Simon Panek (Czech Republic) Narcís Serra (Spain) Relations Chairman, People in Need Foundation Chair of CIDOB Foundation; former Vice President of the Spanish Government Jean-David Lévitte (France) Chris Patten (United Kingdom) Former Sherpa to the President of the Chancellor of Oxford University and co- Radosław Sikorski (Poland) French Republic; former Ambassador to chair of the International Crisis Group; Foreign Minister the United States former EU Commissioner Aleksander Smolar (Poland) Juan Fernando López Aguilar Diana Pinto (France) Chairman of the Board, Stefan Batory (Spain) Historian and author Foundation Member of the European Parliament; Jean Pisani-Ferry (France) Javier Solana (Spain) former Minister of Justice Director, Bruegel; Professor, Université Former EU High Representative for the Adam Lury (United Kingdom) Paris-Dauphine Common Foreign and Security Policy & CEO, Menemsha Ltd (Germany) Secretary-General of the Council of the Member of Parliament; Chairman of the EU; former Secretary General of NATO Monica Macovei (Romania) Foreign Affairs Committee Member of the European Parliament George Soros (Hungary/USA) Lydie Polfer () Founder and Chairman, Open Society Emma Marcegaglia (Italy) Member of Parliament; former Foreign Foundations CEO of Marcegalia S.p.A; former Minister President, Confindustria Teresa de Sousa (Portugal) Journalist I´ñigo Méndez de Vigo (Spain) Charles Powell Secretary of State for the European (Spain/United Kingdom) Goran Stefanovski (Macedonia) Union Director, Real Instituto Elcano Playwright and Academic David Miliband Andrew Puddephatt Rory Stewart (United Kingdom) (United Kingdom) (United Kingdom) Member of Parliament Member of Parliament; Former Director, Global Partners & Associated Alexander Stubb (Finland) Secretary of State for Foreign and Ltd. Minister for Foreign Trade and Commonwealth Affairs Vesna Pusic´ (Croatia) European Affairs; former Foreign Alain Minc (France) Foreign Minister Minister President of AM Conseil; former Michael Stürmer (Germany) chairman, Le Monde Robert Reibestein (The Netherlands) Chief Correspondent, Die Welt Nickolay Mladenov (Bulgaria) Director, McKinsey & Company Ion Sturza (Romania) Foreign Minister; former Defence President, GreenLight Invest; former Minister; former Member of the George Robertson Prime Minister of the Republic of European Parliament (United Kingdom) Moldova Former Secretary General of NATO Dominique Moïsi (France) Paweł S´wieboda (Poland) Senior Adviser, IFRI Albert Rohan (Austria) President, Demos EUROPA - Centre for Former Secretary General for Foreign European Strategy Pierre Moscovici (France) Affairs Member of Parliament; former Minister Vessela Tcherneva (Bulgaria) for European Affairs Adam D. Rotfeld (Poland) Spokesperson and advisor, Ministry of Former Minister of Foreign Affairs; Foreign Affairs Nils Muiznieks (Latvia) Co-Chairman of Polish-Russian Group Council of Europe Commissioner for on Difficult Matters, Commissioner of Teija Tiilikainen (Finland) Human Rights Euro-Atlantic Security Initiative Director, Finnish Institute for International Relations Hildegard Müller (Germany) Norbert Röttgen (Germany) Chairwoman, BDEW Bundesverband Minister for the Environment, Luisa Todini (Italy) der Energie- und Wasserwirtschaft Conservation and Nuclear Safety Chair, Todini Finanziaria S.p.A Wolfgang Münchau (Germany) Olivier Roy (France) Loukas Tsoukalis (Greece) President, Eurointelligence ASBL Professor, European University Institute, Professor, University of Athens and Alina Mungiu-Pippidi (Romania) Florence President, ELIAMEP Professor of Democracy Studies, Hertie Daniel Sachs (Sweden) Erkki Tuomioja (Finland) School of Governance CEO, Proventus Foreign Minister Kalypso Nicolaïdis (Greece/ Pasquale Salzano (Italy) Daniel Valtchev, (Bulgaria) France) Vice President for International Former Deputy PM and Minister of Professor of International Relations, Governmental Affairs, ENI Education University of Oxford Stefano Sannino (Italy) Vaira Vike-Freiberga (Latvia) Daithi O’Ceallaigh (Ireland) Director General for Enlargement, Former President Director-General, Institute of European Commission International and European Affairs Antonio Vitorino (Portugal) Javier Santiso (Spain) Lawyer; former EU Commissioner Christine Ockrent (Belgium) Director, Office of the CEO of Telefónica Editorialist Europe Andre Wilkens (Germany) Director Mercator Centre Berlin and Andrzej Olechowski (Poland) Marietje Schaake Director Strategy, Mercator Haus Former Foreign Minister (The Netherlands) Carlos Alonso Zaldívar (Spain) Dick Oosting (The Netherlands) Member of the European Parliament Former Ambassador to Brazil CEO, European Council on Foreign Klaus Scharioth (Germany) Relations; former Europe Director, Stelios Zavvos (Greece) Dean of the Mercator Fellowship CEO, Zeus Capital Managers Ltd Amnesty International on International Affairs; former Mabel van Oranje Ambassador of the Federal Republic of Samuel Žbogar (Slovenia) Germany to the US EU Representative to Kosovo; former (The Netherlands) Foreign CEO, The Elders 13 Also available Supporting Moldova’s Egypt’s Hybrid Revolution: Ukraine after the Tymoshenko from ECFR Democratic Transition a Bolder EU Approach verdict Nicu Popescu, October 2009 Anthony Dworkin, Daniel Korski Andrew Wilson, December 2011 New World Order: The Balance (ECFR/17) and Nick Witney, May 2011 (ECFR/47) of Soft Power and the Rise of (ECFR/32) Herbivorous Powers Can the EU rebuild failing European Foreign Policy Ivan Krastev and Mark Leonard, states? A review of Europe’s A Chance to Reform: How the Scorecard 2012 October 2007 (ECFR/01) Civilian Capacities EU can support Democratic February 2012 (ECFR/48) Daniel Korski and Richard Gowan, Evolution in Morocco A Power Audit of EU-Russia October 2009 (ECFR/18) Susi Dennison, Nicu Popescu The Long Shadow of Relations and José Ignacio Torreblanca, Ordoliberalism: Germany’s Mark Leonard and Nicu Popescu, Towards a Post-American May 2011 (ECFR/33) Approach to the Euro Crisis November 2007 (ECFR/02) Europe: A Power Audit of Sebastian Dullien and Ulrike EU-US Relations China’s Janus-faced Response Guérot, February 2012 (ECFR/49) Poland’s second return to Europe? Jeremy Shapiro and Nick Witney, to the Arab Revolutions Paweł Swieboda, December 2007 October 2009 (ECFR/19) Jonas Parello-Plesner and The End of the Putin Consensus (ECFR/03) Raffaello Pantucci, June 2011 Ben Judah and Andrew Wilson, Dealing with Yanukovych’s (ECFR/34) March 2012 (ECFR/50) Afghanistan: Europe’s Ukraine forgotten war Andrew Wilson, March 2010 What does Turkey think? Syria: Towards a Political Daniel Korski, January 2008 (ECFR/20) Edited by Dimitar Bechev, June Solution (ECFR/04) 2011 (ECFR/35) Julien Barnes-Dacey, March 2012 Beyond Wait-and-See: (ECFR/51) Meeting Medvedev: The Politics The Way Forward for What does Germany think of the Putin Succession EU Balkan Policy about Europe? How the EU Can Support Andrew Wilson, February 2008 Heather Grabbe, Gerald Knaus Edited by Ulrike Guérot and Reform in Burma (ECFR/05) and Daniel Korski, May 2010 Jacqueline Hénard, June 2011 Jonas Parello-Plesner, March (ECFR/21) (ECFR/36) 2012 (ECFR/52) Re-energising Europe’s Security and Defence Policy A Global China Policy The Scramble for Europe China at the crossroads Nick Witney, July 2008 (ECFR/06) François Godement, June 2010 François Godement and Jonas François Godement, April 2012 (ECFR/22) Parello-Plesner with Alice (ECFR/53) Can the EU win the Peace in Richard, July 2011 (ECFR/37) Georgia? Towards an EU Human Rights Europe and Jordan: Reform Nicu Popescu, Mark Leonard and Strategy for a Post-Western Palestinian Statehood at the before it’s too late Andrew Wilson, August 2008 World UN: Why Europeans Should Julien Barnes-Dacey, April 2012 (ECFR/07) Susi Dennison and Anthony Vote “Yes” (ECFR/54) Dworkin, September 2010 Daniel Levy and Nick Witney, A Global Force for Human (ECFR/23) September 2011 (ECFR/38) Rights? An Audit of European Power at the UN The EU and Human Rights The EU and Human Rights at Richard Gowan and Franziska at the UN: 2010 Review the UN: 2011 Review Brantner, September 2008 Richard Gowan and Franziska Richard Gowan and Franziska (ECFR/08) Brantner, September 2010 Brantner, September 2011 (ECFR/24) (ECFR/39) Beyond Dependence: How to CHINA AND GERMANY: WHY THE EMERGING SPECIAL RELATIONSHIP FOR MATTERS EUROPE deal with Russian Gas The Spectre of a Multipolar How to Stop the Pierre Noel, November 2008 Europe Demilitarisation of Europe (ECFR/09) Ivan Krastev & Mark Leonard Nick Witney, November 2011 with Dimitar Bechev, Jana (ECFR/40) Re-wiring the US-EU relationship Kobzova & Andrew Wilson, Daniel Korski, Ulrike Guerot and October 2010 (ECFR/25) Europe and the Arab Mark Leonard, December 2008 Revolutions: A New Vision for (ECFR/10) Beyond Maastricht: a New Democracy and Human Rights Deal for the Eurozone Susi Dennison and Anthony Shaping Europe’s Afghan Surge Thomas Klau and François Dworkin, November 2011 Daniel Korski, March 2009 Godement, December 2010 (ECFR/41) (ECFR/11) (ECFR/26) Spain after the Elections: the A Power Audit of EU-China The EU and Belarus after “Germany of the South”? Relations the Election José Ignacio Torreblanca and John Fox and Francois Godement, Balázs Jarábik, Jana Kobzova Mark Leonard, November 2011 April 2009 (ECFR/12) and Andrew Wilson, January (ECFR/42) 2011 (ECFR/27) Beyond the “War on Terror”: Four Scenarios for the Towards a New Transatlantic After the Revolution: Europe Reinvention of Europe Framework for Counterterrorism and the Transition in Tunisia Mark Leonard, November 2011 Anthony Dworkin, May 2009 Susi Dennison, Anthony Dworkin, (ECFR/43) (ECFR/13) Nicu Popescu and Nick Witney, March 2011 (ECFR/28) Dealing with a Post-Bric Russia The Limits of Enlargement-lite: Ben Judah, Jana Kobzova and European and Russian Power in European Foreign Policy Nicu Popescu, November 2011

www.ecfr.eu the Troubled Neighbourhood Scorecard 2010 (ECFR/44) Nicu Popescu and Andrew March 2011 (ECFR/29) Wilson, June 2009 (ECFR/14) Rescuing the euro: what is The New German Question: China’s price?’ The EU and human rights at the How Europe can get the François Godement, November UN: 2009 annual review Germany it needs 2011 (ECFR/45) Richard Gowan and Franziska Ulrike Guérot and Mark Leonard, Brantner, September 2009 April 2011 (ECFR/30) A “Reset” with Algeria: the (ECFR/15) Russia to the EU’s South

May 2012 Turning Presence into Power: Hakim Darbouche and Susi What does Russia think? Lessons from the Eastern Dennison, December 2011 edited by Ivan Krastev, Mark Neighbourhood (ECFR/46) Leonard and Andrew Wilson, Nicu Popescu and Andrew September 2009 (ECFR/16) Wilson, May 2011 (ECFR/31) ECFR/55 14 ABOUT ECFR

The European Council on Foreign Relations (ECFR) is the first pan-European think-tank. Launched in October 2007, its objective is to conduct research and promote informed debate across Europe on the development of coherent, effective and values-based European foreign policy.

ECFR has developed a strategy with three distinctive elements that define its activities:

•A pan-European Council. ECFR has brought together a distinguished Council of over one hundred Members - politicians, decision makers, thinkers and business people from the EU’s member states and candidate countries - which meets once a year as a full body. Through geographical and thematic task forces, members provide ECFR staff with advice and feedback on policy ideas and help with ECFR’s activities within their own countries. The Council is chaired by Martti Ahtisaari, Joschka Fischer and Mabel van Oranje.

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• A distinctive research and policy development process. ECFR has brought together a team of distinguished researchers and practitioners from all over Europe to advance its objectives through innovative projects with a pan-European focus. ECFR’s activities include primary research, publication of policy reports, private meetings and public debates, ‘friends of ECFR’ gatherings in EU capitals and outreach to strategic media outlets.

ECFR is backed by the Soros Foundations Network, the Spanish foundation FRIDE (La Fundación para las Relaciones Internacionales y el Diálogo Exterior), the Bulgarian Communitas Foundation, the Italian UniCredit group, the Stiftung Mercator and Steven Heinz. ECFR works in partnership with other organisations but does not make grants to individuals or institutions. www.ecfr.eu CHINA AND GERMANY: WHY THE EMERGING SPECIAL RELATIONSHIP FOR MATTERS EUROPE

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© ECFR May 2012.

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