Author: ceciliazhang

Why is China accused of dividing Europe?   [Copy link] 中文

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Post time 2017-9-4 08:25:49 |Display all floors
cdpanda Post time: 2017-9-4 02:42
The German FM is barking up the wrong tree. Both China and EU member-states are free to pursue tra ...

If he is to bark a tree, then certainly China is the only tree to bark at. No other country has the same aspirations, even close.

China and EU member-states are free to pursue trade and investment deals that serve their NATIONAL interests.


In almost any deal that takes place within Europe, doing the deal with European partners would best serve those national interests of European states or enterprises. That's what made (western) Europe prosperous and safe after WW2.

There are hardly any cases where making the deal with China would better serve such interests. It is only through global market capitalism and certain rules within, that China gets access to them.

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Post time 2017-9-4 09:13:32 |Display all floors
cdpanda Post time: 2017-9-4 02:42
The German FM is barking up the wrong tree. Both China and EU member-states are free to pursue tra ...



Is that so? Greece and Serbia and Hungary are free to join the E.U. but do not need to listen to the concert of voices from their fellow members? I think you have a dim understanding of what contracts, treaties and the laws are all about and what the E.U. is trying to do.

The European Union has a court that can decide. It is not about sovereignty; it is about respecting membership duties and rights. The former East European states have equal rights in the E.U. but they are not equals in their dealings with China. China won't reciprocate when these states succumb to Chinese pressure to make concessions. For example there are thousands of Chinese living in Hungary alone. There hardly are any Hungarians in China and that's not going to change.

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Post time 2017-9-4 16:33:12 |Display all floors
This post was edited by cdpanda at 2017-9-4 16:35
Jaaja Post time: 2017-9-4 08:25
If he is to bark a tree, then certainly China is the only tree to bark at. No other country has th ...

The German FM wants to have his cake and eat it too. He should know that Germany not China has the most export-dependent economy in the world, so much so that President Trump singled out German auto companies in his address to the Europeans a while back. What the German FM is accusing China of doing in Europe -- investing in EU member-states as a backdoor to the whole EU market -- is exactly what Germany is doing in the USA -- investing in NAFTA member-state Mexico as a backdoor to the US market. But the Japanese, South Koreans and now the Chinese are also doing that. And that's why Trump wants to pull the plug on NAFTA so that foreign companies from non-NAFTA countries won't be able to use Mexico as a backdoor to the US market.

But there is another side to the story: China has opened its own domestic market to German auto companies who have succeeded in capturing the largest market share in China. The idea that Germany should ask EU member-states to keep out Chinese companies in order to protect the market share of German companies in the EU while enjoying such as a privileged position in the Chinese market is ironic at best, hypocritical at worst.

China is playing by the rules of the game. And that game is called the globalized economy. If the Germans can't stand Chinese competition, then they might as well pack up their bags and go back home to where they came from. After all, the German FM should know that it is the Germans not the Chinese who have the most to lose from economic protectionism, starting with the Trump Administration.




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Post time 2017-9-5 02:03:52 |Display all floors
cdpanda Post time: 2017-9-4 16:33
The German FM wants to have his cake and eat it too. He should know that Germany not China has the  ...



Mr Gabriel was NOT talking about NAFTA. The U.S. president has not just singled out Germany for selling cars in the U.S.A. - he has targeted many countries, including several Asian ones.

And here is another misleading claim by you:

But there is another side to the story: China has opened its own domestic market to German auto companies who have succeeded in capturing the largest market share in China. The idea that Germany should ask EU member-states to keep out Chinese companies in order to protect the market share of German companies in the EU while enjoying such as a privileged position in the Chinese market is ironic at best, hypocritical at worst.


China has "opened its own domestic market to German auto companies"??? Please name the brands that can export cars to China without getting penalized by China's custom tariffs! It is utter rubbish to say that.

Germans have helped China build its large car manufacturing capacity and today you see plenty of Beemers and Mercs along with Volkswagens and Audis on China's roads, but these cars are made by employing Chinese workers and on assembly lines in China with a large local content in the cars. China is not open the way Germany is.

But why talk about such trivialities when the real issue is about China taking unfair advantage of weak members of the E.U. at the E.U.'s cost?

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Post time 2017-9-6 11:44:45 |Display all floors
This post was edited by cdpanda at 2017-9-6 22:53
seneca Post time: 2017-9-5 02:03
Mr Gabriel was NOT talking about NAFTA. The U.S. president has not just singled out Germany for  ...

Yes, you're right. The Honorable German Foreign Minister was talking about the EU as if it were the German Fourth Reich. And yes, President Trump did call the Germans "bad, very bad" for selling too many German-made luxury cars like the Mercedes in the USA but buying too little US-made cars like the Chevrolet in Germany. He even castigated BMW for building a factory in Mexico to make cars for the US market.

But everybody's doing the same thing: US, German, Japanese, S. Korean and lately Chinese companies have been building factories in Mexico to make cars for the US market which qualifies for zero-tariffs under NAFTA's rules of country origin for the auto manufacturing industry. Mexico has been so successful in attracting foreign automakers that it is now the fourth-largest auto exporter in the world, with cars exported tariff-free not only to the U.S.A but also to Latin America and the EU which has Free Trade Agreements (FTA) with Mexico.

Mexico is just playing by the rules of the game. And that game is called economic globalization.

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Post time 2017-9-6 19:43:13 |Display all floors
cdpanda Post time: 2017-9-6 11:44
Yes, you're right. The Honorable German Foreign Minister was talking about the EU as if it were the ...
And that game is called economic globalization.


Not  for China. For China all this is as much about gaining political influence as it is about free market capitalism.

Chinese companies are not free to make major investments abroad without state approval, and that makes those investments state investments as well as investments of those enterprises.

Thus when Chinese enterprises invest in Europe or elsewhere, they have harder time to get approval for investments to countries that are likely to criticize China about human rights violations, terrotorial disputes, or whatever.

With Germany or USA, state does play such role in controlling investments.

This may not be what the German guy was thinking of, but he should have been. Chinese investments abroad play two games with one hand.

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Post time 2017-9-6 23:29:40 |Display all floors
This post was edited by cdpanda at 2017-9-7 17:49
Jaaja Post time: 2017-9-6 19:43
Not  for China. For China all this is as much about gaining political influence as it is about f ...

As I wrote in my earlier posts, the German FM is the one confusing two separate issues: 1). national sovereignty of EU member-states and 2). economic protectionism for EU markets. Everybody knows that German companies dominate EU markets and that Germany is the one of world's top exporting countries including to China. Most Chinese State-owned companies invest in infrastructure projects in the developing world, which are designed to facilitate trade and investment for Chinese industrial companies. Chinese FDI in the Western World are mostly for manufacturing or services not infrastructure. There are exceptions such as Chinese State investments in infrastructure projects related to its OBOR initiatives. In those cases, China partners with the destination country such as Greece. In other cases. China partners with Western MNCs such as GE which is involved in Chinese State-funded infrastructure projects in 40 countries.

The German FM was talking about the politics and economics of the EU not the politics and economics of China. Those two issues are orthogonal to each other. Fundamentally, the issue is about the national sovereignty of EU member-states which conflicts with the status of the EU as a common market. What the German FM wants is for a centralized authority -- presumably the bureaucrats in Brussels -- to decide for the whole EU its foreign relations with non-EU countries such as China. As I wrote earlier, he is barking up the wrong tree because that's a political issue for EU member-states -- not China -- to decide. If anything, he should blame the UK for "dividing Europe" after voting for BREXIT which is now causing the existential crisis confronting the EU.

As for market access to the EU, he wants to have his cake and eat it too because he should know that Germany is one of the top exporters in the globalized economy. German industrial companies need access to export markets because the German domestic market is too small to support German industry. Chinese companies only need to succeed in the Chinese domestic market which is large enough to support Chinese industry. China actually wants MORE not LESS competition in the Chinese domestic market which is why foreign companies including those from Germany are allowed to operate in China. The best proof of this is the market share of German autos in China which is higher than the market share of German autos in the USA. In fact, the top three best-selling autos in the passenger sedan market in China are all German brands.

Lastly, I think you're mistaken in thinking that China is interested in investing in EU countries in order to influence the politics of the EU. The only reason why China wants to invest in EU countries is because it has to recycle its massive foreign reserves piled up from its export industries. China stopped buying US T-bills starting in 2010 because the financial returns were too low as the US Fed starting printing money as part of its QE programs. China then started buying US and UK real estate -- both individually and institutionally -- as a way to diversify from financial assets and into physical assets.

To my knowledge, China has never interfered in the politics of the EU. It's the other way around, EU countries have always interfered in the politics of China!!!


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