German Chancellor Angela Merkel and Chinese Prime Minister Li Keqiang announced trade agreements worth tens of billions of euros against the background of the White House’s new duties package, introduced a few days ago.
The two countries agreed to work together on transactions worth €20 billion. According to Li Keqiang, with that Berlin and Beijing want to show that they can work together.
Some of the agreements are also new partnerships for large German concerts, such as BASF, BMW, Volkswagen, Daimler, Siemens and Bosch. The Spanish Seat, under the umbrella of VW, will set up a research and development centre in China for the development of electric cars, connectivity and autonomous technologies. The message here is clear: China is ready to open its market for foreign investment, making contrast to commercial conflicts with the US, which have prevented key technology companies such as ZTE and Huawei.
However, it has not been unnoticed that the agreement concerning Germany right to block Chinese investments under existing legislation continues, which provides for similar restrictions on the technology sector or when national security is concerned. This was the reason for Washington to impose heavy sanctions on ZTE and Huawei and prohibit them from being supplied with parts of American producers.
“Free trade has a leading role for both sides and for the global economy”, commented on Li.
On Friday, US President Donald Trump announced a new 25 percent custom duties on Chinese goods worth $34 billion. In response Beijing also introduced tariffs of the same value on US imports.
“We have a lot of direct investment in the US, as well as in China,” Merkel said. “This really is a multilaterally interdependent system that is profitable for all countries if they stick to the rules,” the German Chancellor also said.
Merkel praised China’s efforts to loosen regulations for foreign investors in the country, saying it is very important to see such action regarding the market opening.
Beijing also pledged a 20 billion-dollar package in the form of loans and about 106 million as financial aid to the Middle East countries, as part of the “oil and gas plus” model for resuming economic growth in the region – again throwing an unofficial challenge to Washington, whose key interests in the economy and security of the Middle East are well known. 15 million dollars will go to Palestine and a total of $91 million will fall into Jordan, Lebanon, Syria and Yemen.
The Summit between China and the EU will take place in Beijing on 16-17 July.
