Merkel's visit boosts cooperation

German Chancellor Angela Merkel wrapped up a three-day visit to China on June 14 that saw the signing of more than 20 cooperation agreements, 96 business contracts and increased confidence in tackling problems such as the overcapacity in iron and steel.

Merkel, who was making her ninth visit to China as chancellor and was joined by 11 ministers and vice-ministers, co-chaired the fourth China-Germany intergovernmental consultations with Premier Li Keqiang.

During the consultations, heads of 26 government departments from both countries, including finance, commerce, education, transportation and health, made reports to Li and Merkel as well as signed the agreements.

Germany is the only country with which China has intergovernmental consultations, while China is the only Asian country besides India that Germany has these consultations with. It shows the "uniqueness of the bilateral relations", says Michael Clauss, the German ambassador to China.

Along with deeper and broader cooperation, bilateral relations have entered a "very mature" phase, in which the countries not only reach consensus, but also resolve differences while preventing them from becoming hurdles, observers say.

With overcapacity in China's iron and steel industry, as well as in other countries, the subject was a hot topic during Merkel's visit. Germany is expected to exert its influence in the European Union, while trade unions and company representatives from EU members have complained that China is dumping it excess iron and steel in the region.

"Overcapacity of iron and steel is a global problem, not just China's. We should separate trade conflicts between China and the EU from bilateral trade, as the conflicts are a very small part of trade," Li said after meeting with Merkel.

Since 2008, 85,000 steel industry jobs have been wiped out across the EU, and more massive layoffs are expected. The EU has repeatedly resorted to defensive trade measures in the past year, seeking to impose punitive tariffs against China's steel products, although such products have helped reduce the cost of business in Europe amid economic stagnation.

Yet statistics from Chinese customs show China produced 112 million metric tons of iron and steel products last year and less than 10 percent were exported. Among the exports, more than 50 percent were shipped to Asia and the Middle East.

This means Chinese exports of iron and steel to the EU only take up a small part, says Chen Lifeng, a professor at the University of Science and Technology of China.

He says China has been made a scapegoat for the problems in Europe's iron and steel industries, while really slow technical innovation and the high cost of human resources are among the key reasons.

Rather than resorting to trade protectionism, comprehensive cooperation with China is the way to go, he adds.

"Merkel and I have agreed not to expand and complicate trade conflicts," Li said after his discussions with the German chancellor. "We can work together toward the same direction to properly tackle conflicts and increase common interests."

In addition to holding talks with the premier, Merkel also had dinner with President Xi Jinping, who told her that China expects Germany and the EU to stop resorting to unfair antidumping investigations against Chinese companies.

Xi called for the timely implementation of Article 15 of the Accession Protocol of China's entry to the World Trade Organization, as agreed in 2001. The article stipulates that WTO members should stop following subrogate country measures in antidumping cases against China before Dec 11, 2016.

Merkel said Germany attaches great importance to the implementation of the article.

After high-ranking meetings in Beijing, the German chancellor went to Shenyang in Liaoning province and visited a BMW factory there. The plant is the largest in the province and aims to meet the standard of Industry 4.0 that requires robots to do 90 percent of the work.

About 30 German companies have bases in Shenyang, and more are expected.

Industrial areas in Northeast China are facing problems of renovation and trying to employ structural reforms. Merkel said it is "very important and needs a lot of courage" to take such reforms, and suggested China draw on the experience of Germany when it updated its polluted Ruhr area.

Clauss adds that Germany would like to take part in the process of China's new round of reforms, which offer cooperation opportunities for Chinese and Germany companies.

Contact the writers through zhouwa@chinadaily.com.cn