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14 WORLD maltatoday | WEDNESDAY • 21 JUNE 2023 GERMAN Chancellor Olaf Scholz faced a delicate bal- ancing act this week at Ger- man-Chinese government consultations in Berlin, seek- ing to maintain good ties with Germany's largest trade part- ner while complying with a G7 pledge to "de-risk" from Bei- jing. Scholz received Chinese pre- mier Li Qiang for dinner in the chancellery on Monday evening ahead of the seventh round of bilateral, biennial talks on Tuesday which are al- so the first face-to-face session since the COVID-19 pandemic. The fact Li chose Germa- ny for his first overseas trip as premier reflects the special relationship between Europe and Asia's largest economies. Rapid Chinese expansion and demand for German cars and machinery fuelled Germany's own growth over the past two decades. China became Germany's single biggest trade partner in 2016 and is a core market for top German companies in- cluding Volkswagen, BASF and BMW. "The China-Germany gov- ernment consultations are very distinctive among China's rela- tions with large Western coun- tries," said Wang Yiwei, direc- tor of the Centre for European Studies, Renmin University of China. The relationship has however come under strain amid con- cerns in the West about rising Communist party control over society and the economy, un- fair competition and Beijing's territorial ambitions. Scholz joined other leaders of the Group of Seven (G7) rich democracies last month in pledging to "de-risk" without "decoupling" from China. The meaning of "de-risking" however remains to be defined, say analysts, with China hawks pleading for a general reduc- tion of business and doves singling out areas like critical minerals. Scholz's government is divid- ed between the more hawkish junior coalition partners, the Greens and Free Democrats, and his centre-left Social Dem- ocrats. Analysts in Berlin said the Chinese delegation would like- ly lobby the German govern- ment directly and indirectly via big business to press the Euro- pean Union not to go too far in regulating business in China. "They know German compa- nies will run up direct chan- nels to the chancellery," said Andrew Small, a senior fellow at the German Marshall Fund's Asia program. Avoiding political escalation Mikko Huotari at the Merca- tor Institute for China Studies (MERICS) in Berlin said the talks were a coup for Beijing, showing it still had important partners in the West. "That said it is up to us, to get something out of it - and we have an interest to remain in close contact with China on questions like sustainability and in general, for stable eco- nomic relations," he said. "We also have an interest not to let political tensions escalate." The talks come after Antony Blinken on Sunday (18 June) became the first US secretary of state to visit China in five years, stressing the importance of keeping open lines of com- munication to reduce the risk of miscalculation. They also come as Germany's foreign ministry finalises a pa- per on its approach to China, which is expected to reflect the tougher stance it outlined in its first national security strategy published last week. China poses a growing threat to global security, aggressive- ly claiming supremacy in Asia and seeking to use its economic might to achieve political goals, the strategy said. The government is urging companies to diversify away from China but many German CEOs have warned of the risks of cutting or reducing links with the world's second-big- gest economy while Germany is in recession. The Chinese delegation met with some of those CEOs on Monday, according to people familiar with the plans. Yesterday, after the govern- ment consultations, it headed to Munich to meet regional officials and corporate ex- ecutives reflecting the level of Chinese business with the southern German state of Ba- varia. The Chinese delegation will head to Paris for an official visit and to attend a financial con- ference on 22 and 23 June. Olaf Scholz faced tricky balancing act in Germany-China talks Olaf Scholz (pictured) faces a delicate balancing act this week at German-Chinese government consultations in Berlin Chinese Premier Li Qiang's visit to Berlin is his first foreign trip since taking office in March