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China and Germany Pledge Closer Economic Cooperation and ‘smooth Supply Chains’

China and Germany agreed to strengthen economic cooperation and open up financial markets to spur economic growth and counter global challenges after resuming high-level talks in Frankfurt on Sunday.

Both sides agreed to strengthen policy coordination and defend global financial security and global trade rules, according to a statement published by the Chinese finance ministry after the talks between Vice-Premier He Lifeng and German Finance Minister Christian Lindner.

The statement said they also agreed to “ensure smooth supply chains” without providing further details.

The talks came at a time when the two countries are struggling to manage the risk of economic downturn and follows the publication of a German plan to “de-risk” its relationship with China by reducing its reliance on goods produced in the country.

“China is ready to work with Germany… to deepen mutual benefit and win-win cooperation so as to inject more positivity in the China-German comprehensive strategic partnership,” He said, according to state agency Xinhua.

The talks were the first China-Germany high-level financial dialogue to be held in four years as a result of the Covid-19 pandemic and come as Berlin is reassessing the relationship.

Last week, China’s ambassador urged Germany and Europe to be more open to Chinese electric vehicles and 5G technology.

At a National Day event in Berlin on Thursday to mark the 74th anniversary of the founding of the People’s Republic, Wu Ken said China was willing to deepen cooperation with Europe and Germany on the basis of mutual benefit.

“We hope Europe will show more openness and self-confidence on the issue of electric vehicles and Huawei’s 5G technology,” Wu said.

He was responding to reports that Germany’s Interior Ministry is planning to force local telecoms operators to rid their networks of Chinese-supplied critical components by 2026, including parts supplied by Huawei Technologies and ZTE Corporation.

The European Commission also launched an anti-subsidy probe last month into China’s electric vehicle exports.

In their last round of talks in January 2019, both sides signed agreements to strengthen coordination in banking, finance and capital markets, and pledged to further open market access and deepen cooperation in a bid to broaden economic ties.

On Thursday, Wu acknowledged Germany and Europe’s contribution to China’s reform and development over the decades, and stressed that his country would keep opening up. This progress had also benefited Europe, he said.

“Reform and opening up, which began 45 years ago, is the institutional code for China’s great achievements, and China’s future high-quality economic development will also take place under more open conditions,” he said.

“In turn, China’s development has contributed to the economic prosperity and well-being of Europe and Germany, and China has become an important growth and profit market for many German companies.”

However, disagreements between the two countries have widened in the past three years, as the pandemic disrupted exchanges and cooperation.

“Recently, some European think tanks and so-called China experts have created a lot of disparaging articles and viewpoints on China’s economy, some even portrayed China as ‘the source of risk’ to the global economy,” he said.

“In the face of a century of changes and the ‘turn of the times’, as well as increasing global challenges, awareness of worries and risks is necessary and beneficial.”

Wu said China understood German’s concerns and fears but the “fear of change and competition should not lead us to stray from the path [of cooperation] or to put up barriers”.

“I hope that the German government and society can continue to view students and scholars from China with an open mind rather than with suspicion or even vigilance,” Wu said, calling on both sides to renew efforts to improve ties and understanding.

“We need to sow more seeds of friendship in the hearts of the young generations of the two countries. They are not risks, but the future of the two countries, as well as builders of bilateral ties.”

Source: South China Morning Post