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Chinese premier Li Keqiang this week urged Mrs Merkel to boost trade ties but stay out of “internal affairs” such as human rights and the political situation in Hong Kong. It comes as EU-China relations quickly deteriorate after a spell of investment agreements. China has in recent months continued and furthered its crackdown on the country’s ethnic Uighur minority in Xinjiang, the country’s westernmost province.
Germany and the EU have only recently vocally opposed the abuses.
Last month the EU imposed sanctions against four Chinese officials in Xinjiang, to which Beijing reacted with harsh counter-sanctions against EU diplomats, lawmakers and academics.
Chinese consumers have also reacted with boycotts against some western companies.
In May, a German parliamentary committee will hold a public hearing on “human rights violations against the Uighurs”.
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Germany-China: Merkel held talks with Beijing this week
But despite this, Mrs Merkel’s country continues to welcome a flood of Chinese investment.
Germany consistently tops lists of European countries that have received masses of Chinese money.
In 2016, along with the UK and Italy, Germany was the largest recipient of investments in energy, automotive, agriculture, real estate, industrial equipment, as well as information and communications technology, according to a 2020 report published in, ‘US-China Foreign Relations: Power Transition and its Implications for Europe and Asia’.
While China took 9.5 percent of London’s Heathrow airport in 2013, it secured a shocking 82.5 percent of Germany’s Hahn airport near Frankfurt the following year.
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Chinese state-owned companies were so well-placed in Germany that by 2016 debate was rife about takeovers of technology brands in fields where “national security is at risk”, according to the report.
It led Mrs Merkel to take action and bar a Chinese company from acquiring the semiconductor company Aixtron.
But while the German Chancellor has recently moved to distance Germany from China, previous rhetoric suggests her actions could be too little too late.
Last year, she urged for more freedom for European companies to invest in China as China’s do in Europe.
She called for barriers to European companies wanting to invest in China to be knocked down.
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Emmanuel Macron: Macron, Merkel and President Xi Jinping pictured in 2019
Speaking at a news conference, she said: “For the investment agreement with China we naturally expect reciprocity.
“If the Chinese side gives no market access in certain areas, that will naturally mean that access to the European market will also be more restricted.”
In the waning days of 2020, Mrs Merkel, France’s Emmanuel Macron and EU top brass infuriated US President Joe Biden after signing a mammoth investment deal with China believed to be worth £176billion.
By February this year, China had overtaken the US to become the EU’s biggest trading partner.
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Trade between China and the EU was worth $709bn (€586bn, £511bn) in 2020, compared with $671bn (€569bn, £485bn) worth of imports and exports from the US.
More importantly, China is willing to pump cash and provide loans to countries like Serbia that have weak economies that the European Central Bank (ECB) or other development banks would never consider.
This is part of what is known as China’s Belt and Road Initiative, or the ‘new Silk Road’.
Beijing has pumped investment for infrastructure projects like bridges, highways, and high-speed railway lines in order to better spread Chinese goods through South East Asia, Central Asia, the Middle East, Africa, and Europe.
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Many fear that the investment – often fast without any economic checks, carried out by migrant Chinese workers – could have hidden strings attached in the future.
President Xi Jinping has already set out his goal to transform China into a leading economic and political power by 2050.
It is widely believed that the Belt and Road is the most obvious way he will get there.