(Bloomberg) — German Chancellor Olaf Scholz has arrived in China with a major business delegation for his first in-person meeting with President Xi Jinping, as tensions rise between Beijing and Brussels.
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Xi is welcoming the first major European leader to China in more than two years on the heels of a domestic political victory, having just secured a precedent-defying third term in office. The one-day visit on Friday also comes as China rebounds this week from a record market rout sparked by policies Xi laid out at last month’s congress.
The Chinese leader’s efforts to make ties with Germany are part of a broader push to prevent with the European Union from further deteriorating, as Beijing faces an internal relations hostile environment in Washington. Ties between China and the West have been strained by Xi’s crackdown on Hong Kong, treatment of Muslims in Xinjiang and refusal to condemn Russia’s invasion of Ukraine.
Berlin is working to hone a new national strategy on China that aims to weaken reliance, diversify supply chains and enhance security, while reinforcing business ties. That leaves Scholz walking a fine line between pushing trade ties in Beijing, while voicing concerns on sensitive allegations of human rights violations by China.
Last year, the EU halted an investment agreement with China after both sides traded sanctions over Xinjiang. A panel of UN experts in 2019 said an estimated 1 million people had been sent to counter-terrorism internment facilities in the far west region, part of a set of policies the US has said amount to genocide. Beijing denies such allegations.
Scholz wrote in a guest article for German publication Frankfurter Allgemeine Zeitung on Wednesday that Berlin was seeking cooperation with China. “China remains an important economic and trading partner for Germany and Europe, even under changed circumstances,” he said. “We do not want decoupling.”
The German leader is accompanied by a powerhouse delegation expected to include top executives from BASF SE, Volkswagen AG, Deutsche Bank AG and BioNTech SE. China will be looking to reassure foreign business leaders that it’s open for investment and trade, despite a strict Covid Zero policy that’s weighed on the economy and effectively closed the nation’s borders for nearly three years.
Xi has hosted a flurry of top foreign leaders from Vietnam, Pakistan and Tanzania this week, as he returns to in-person diplomacy after recently breaking a long spell of Covid isolation. Those meetings come ahead of the Chinese leader’s expected attendance of major summits in Indonesia and Thailand later in the month, where he could sit down with President Joe Biden.
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