German chancellor's delegation shows key role of pragmatic cooperation in ties

German Chancellor Olaf Scholz, who is on a three-day official visit to China starting on Sunday, attends an exchange event with students at Tongji University in Shanghai on Monday. MICHAEL KAPPELER/AP

German Chancellor Olaf Scholz's eye-catching China visit, which brought him to Beijing on Monday evening following trips to Chongqing and Shanghai, will boost the confidence of German businesses in expanding their presence in the Chinese market, analysts said.

Scholz was expected to meet with President Xi Jinping and have talks with Premier Li Qiang in Beijing on Tuesday before concluding his three-day official visit to China, which started on Sunday.

While in Shanghai on Monday, Scholz visited the Asia-Pacific Innovation Center of Covestro, a German manufacturer of high-quality polymer materials, and met with students at Tongji University.

"We are deeply honored to welcome Chancellor Scholz and get the opportunity to highlight the potential of the chemical industry as well as Covestro to help drive sustainable change in China and the rest of the world," Covestro CEO Markus Steilemann said in a news release.

"Our decadeslong presence in China epitomizes the spirit of Sino-German cooperation, which has been strongly beneficial for both sides. We count on the support of both governments in further catering for openness and mutual trust," Steilemann added.

China stands as one of Covestro's primary markets, with its 2023 sales in China accounting for over 20 percent of the group's total and its cumulative investment in the country exceeding 4 billion euros ($4.26 billion), according to the news release on the company's website.

Scholz's China visit, the second one since he became chancellor in late 2021, came after Germany's federal government pushed for a "de-risking" policy in July to reduce economic reliance on China.

However, observers said that the visiting delegation, which included the federal ministers of environment, agriculture and transportation, as well as many German business leaders, including executives from BMW, Bayer, Siemens and ThyssenKrupp, shows that pragmatic cooperation remains the cornerstone of the bilateral ties.

Gunter Schoech, director of German market research and consulting company Debrouillage, said that in reality, businesses simply have a better sense than ideological hardliners of pragmatic cooperation for the common good.

"The visit by Scholz's delegation will likely give them a boost," Schoech said in an opinion piece published on the website of China Global Television Network.

The aim for global transformation toward a sustainable, green economy is the common ground between China and Germany that the dialogue on various contested topics will be built upon, Schoech added.

In 2023, China remained Germany's top trading partner for the eighth straight year, with bilateral trade reaching 253.1 billion euros.

Miguel Angel Lopez Borrego, chairman of ThyssenKrupp AG, was quoted by Shanghai-based news outlet ThePaper.cn as saying that Scholz's visit to China fully demonstrates the importance of the Sino-German relationship.

For many years, China and Germany have been important trading partners, maintaining a strong and close cooperative relationship, Borrego said. Thanks to this close relationship, many German companies, including ThyssenKrupp, have continued to invest in China and have achieved significant development, he added.

The German Chamber of Commerce in China, in its report "Competitiveness of German Companies in China", which was released ahead of Scholz's visit to China, said that German companies operating in China face a range of challenges but are optimistic about growth.

It found that 79 percent of the companies surveyed were planning to continue to invest in China and remain competitive.

Maximilian Butek, executive director of the German Chamber of Commerce in China, said the report shows that the companies are confident in the Chinese market and the long-term outlook of China's economy.

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