With raft of deals, China and Germany swear to keep trade free

Irving Hamilton
July 11, 2018

In addition to multiple joint cooperation projects between governmental agencies, companies like BASF, BMW, Volkswagen, Daimler, Siemens and Bosch announced deals and partnerships.

Chinese Premier Li Keqiang and German Chancellor Angela Merkel co-chair the fifth round of intergovernmental consultations in Berlin, Germany, July 9, 2018.

Li stressed the need to fight protectionism, saying China needed a stable and peaceful framework so it could develop further, and that was only possible with free trade: "We are against unilateralism - we are in favor of free trade".

Merkel said she hoped a Sino-European summit on July 16-17 would bring about progress on protecting investments and added: "I also hope that Germany and China can make a contribution towards ensuring that the world does not end up blundering into a spiral of trade conflicts".

The comments came after the US imposed 25 percent tariffs on roughly $34 billion of Chinese products, and China announced higher duties on American imports. Last week, US President Donald Trump imposed 25 percent tariffs on $34 billion of Chinese goods, in an attempt to narrow the trade deficit.

Trump has also imposed tariffs on aluminum and steel imports that include the European Union, and has threatened additional tariffs on products like automobiles, singling out Germany in particular.

The head of the Asia-Pacific Committee of German Business (APA), Hubert Lienhard, said that in the face of a growing protectionist agenda in the U.S., a joint German-Chinese message to the White House "could be one the of things emerging from today's government consultations".

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China is willing to discuss with the German side to jointly explore the third-party market, and Germany is willing to give full play to its advantages to work with China in Industry 4.0.

"We have a lot of direct investment in the United States of America, we have a lot of direct investment in China", Merkel said. "This regularly creates problems, but they certainly can be addressed at joint meetings".

She also noted that China and Germany will sign a memorandum of understanding on the cooperation of autopilot, which is a milestone for the two sides' cooperation in automobile industry.

The president of Germany's foreign trade group BGA, Holger Bingmann, told the German regional newspaper Rhein-Neckar-Zeitung that China was already moving in the right direction.

While Germany appreciates China's further measures to open its financial market, China supports the construction of Frankfurt financial center and the offshore market of renminbi.

Bingmann added, though, that other sectors were still out of reach for foreign market players.

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