German Chancellor Angela Merkel during her joint press conference with Chinese Premier Wen Jiabao in Beijing yesterday. Merkel is holding top-level talks with Europe’s debt crisis taking centre stage as it begins to drag on the two global powers. Image Credit: AFP

For several decades, the Americans believed they ‘owned’ the West’s relationship with China. The most recent symbol of that is the US-China Strategic and Economic Dialogue between the two governments. But then, a woman entered the global diplomatic game. Hint: It’s not Hillary Clinton. It’s Angela Merkel, the world’s leading woman politician.

The German chancellor has just completed another visit to China, accompanied by scores of her top ministers and an outsized contingent of CEOs. That, of course, is what lots of countries do. Nothing special in that. Lots of countries do that.

What is significant is that this meeting is part of a strategic dialogue which the two countries announced two years ago — in July 2010, during Angela Merkel’s fourth visit to China as German chancellor. That status had until then been reserved just for the US.

The Chinese are extremely meticulous when it comes to symbolic moves and announcements. Every step they take, especially regarding expressing favour or disfavour, is calculated to the nth degree. Such is the hallmark of a highly refined, court-centred political culture that reaches back thousands of years.

Even so, is it really a big deal? After all, the Chinese favour arranging world affairs in such a manner. They like to maintain a multitude of different relationships simultaneously. The size of the country’s population naturally puts China at the centre of the various overlapping country pairings.

Personal rapport

What does matter is that the Chinese-German dialogue is based on a warm personal rapport. That became readily apparent at its launch two years ago. Prime Minister Wen Jiabao, who had just met with his German counterpart in Beijing, accompanied her on a trip to Xian, China’s ancient imperial capital. Wen, ever the perfect host, welcomed Merkel that day — which happened to be her 56th birthday — at her hotel for breakfast with a traditional Chinese birthday cake.

Now that Wen is leaving his post as prime minister, Merkel came to visit to pay her personal respects to him before the leadership change. The personal dimension aside, what should the world make of the Chinese-German relationship?

Is it a crafty Chinese charm offensive to which the Germans are succumbing?

A strategic summit of two mega-mercantilists?

The natural consequence of the economic confusion in present-day Europe?

Or no big deal whatsoever?

To be sure, the Chinese, for the time being, are greatly concerned about the economic state of Europe. The continent is one of their top two customers in the world. More generally, since China’s national interest is completely tied to stability of the world economy, they understandably want to talk to the key person on handling the euro crisis. Merkel is just that person.

Decision-making structure

She is also a welcome antidote to the amorphous decision-making structure of Europe. There are too many presidents hopping around, people with imposing titles but unclear mandates and authority. Merkel has become what Henry Kissinger has long called for — the equivalent of the single ‘phone number’ in Europe to get an authoritative answer from somebody in charge.

The utility — and mutual attraction — in the emerging Chinese-German special relationship rests on many factors and considerations. What unites the Chinese and the Germans is both countries know that they have their problems and drawbacks — as virtually all nations do.

But they also know that, rather than letting problems fester, they are consistently working on remedying them, whether by strengthening domestic demand or letting the renminbi appreciate.

And they know that playing unilateral blame games, as is frequently the case in the US, is often just a highly transparent effort to deflect attention from one’s homegrown problems.

Beyond their common belief that we are living in a world where all are sinners and all need to strive for self-improvement, the Chinese and Germans share:

A strong belief in the need for fiscal consolidation;

A desire to achieve balanced growth in socioeconomic terms;

Strong doubts about the primacy of the financial economy, and

A shared reliance on the manufacturing sector as a vital tool foreconomic growth.

That Merkel trained as a scientist only adds further to the (mutual) respect. So does the fact that she — along with many of her country’s leading manufacturers — is focused on being on the cutting edge of green growth. China’s interest is further tickled by the fact that Germany carries no big stick and rather seeks to convince more by the power of its example.

Another reason for the Chinese to raise Germany to an elevated partner status relates to counterbalancing the US, which is a natural Chinese interest. The two countries’ leaderships share a genuine concern that the political situation inside the US is so disjointed that there are very real doubts about the continued ability of the US to manage world affairs.

Even more worrisome is the question of whether the US is actually able at this point to pursue a rational course on key domestic policy initiatives, such as fiscal policy.

But the Chinese are realists. Their ambition is not to unhinge the Germans from their alliance with the US. Rather, it is about the hope that, by partnering with Germany, Chinese arguments regarding the future stability-oriented path of the global economy will have more weight in the G20 and other international forums.

Finally, the German-Chinese relationship also has a direct bearing on the current regional tensions between Tokyo and Beijing. The positive example of the Chinese relationship with Germany must be especially stinging to the Japanese.

That could also be precisely how the Chinese intend for it to come across. They know that Japan and Germany are both keen on overcoming a difficult legacy stemming from the Second World War.

Yet it is far too early to assess what the real, long-term impact of the strategic dialogue between Germany and China will be.

Stephan Richter is publisher and 
editor-in-chief of The Globalist.