Merkel Visit

German Businesses Face Off with China

epa05360883 German Chancellor Angela Merkel (L) shakes hands with Chinese Premier Li Keqiang (R) after a joint press conference at the Great Hall of the People in Beijing, China, 13 June 2016. The German Chancellor is on a three-day visit to China from 12 to 14 June. EPA/HOW HWEE YOUNG +++(c) dpa - Bildfunk+++
German Chancellor Angela Merkel shakes hands with Chinese Premier Li Keqiang in Beijing.
  • Why it matters

    Why it matters

    With the Chinese economy slowing down, German companies see an opportunity to pressure Beijing into adopting reforms that would give them freer access to Chinese markets.

  • Facts

    Facts

    • Twenty German business leaders joined Chancellor Angela Merkel on a visit to China this week.
    • German and Chinese trade representatives signed 24 deals worth €3 billion.
    • The Chinese hydroelectric power company Three Gorges acquired Meerwind, one of the largest wind parks off the coast of the North Sea.
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    Audio

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Chancellor Angela Merkel is visiting Beijing to breathe new life into Germany China relations.

And during the trip, German companies have demonstrated a renewed sense of self-confidence during consultations with their Chinese counterparts, speaking openly about the difficulties they have in dealing with Asia’s largest economy.

On Monday, Prime Minister Li Keqiang and Chinese business leaders listened politely as Hubert Lienhard, chairman of the Asia-Pacific Committee of German Business and a member of her trade delegation, spoke about what he believed were Germany’s problems with China.

German business leaders in the room nodded in agreement as Mr. Lienhard complained about slow Internet, as well as forced joint ventures with Chinese companies and a lack of cyber security and reciprocal market access.

In particular, Mr. Lienhard complained about “forced technology transfers,” referring to the fact that the Chinese government often requires foreign companies to transfer technological know-how as a condition for gaining market access.

One participant in Monday’s talks told Handelsblatt on condition of anonymity that German companies felt they had struck unfair deals in the last round of bilateral consultations two years ago.

But the slowdown in China has busted the myth of Beijing’s economic invincibility, giving German business leaders more confidence and greater leverage over their Chinese competitors.

Twenty German business leaders have joined Ms. Merkel during her visit to China this week, including Kurt Bock of BASF, Joe Kaeser of Siemens and Heinrich Hiesinger of Thyssen-Krupp.

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