Angela Merkel and Xi Jinping build a new world order
Image by Jonathan Kos-Read on Flickr

Our lead researcher Haroon Sheikh has started to write weekly columns for Dutch newspaper NRC. In these columns, he shares his insights about changes in the global hegemony, economy and society. In his first column he writes about the emerging alliance between Germany and China.

Besides reporting on protests about G20, the media mostly spoke about personal intrigues: the first meeting between Trump and Putin, which was particularly exciting in the context of the alleged influence of Russia in Trump’s election, or the protocol breach when Ivanka took her father’s seat. No earth-shattering news. The mutual differences about free trade and climate are very big and a strong shared vision was not to be expected. Nevertheless, there was a great new development: Germany and China come closer together.

Prior to the top, Die Welt published an opinion piece by the Chinese president Xi Jinping in which he called for more cooperation. He suggested, for instance, to merge the Made in China 2025 plans with Industry 4.0. Chancellor Merkel indicated to want to conclude an investment agreement with China, which will one day lead to a free trade agreement. In addition, agreements have been made to invest together in other countries such as Angola and Afghanistan.

Over the years, both countries have gradually come closer together. Germany’s Ostpolitik initially focused on the old Warsaw block. Merkel’s Germany looks farther and because China has become the most important trading partner since 2016, it is a logical step to start doing business together. German technology has made its way to the immense Chinese population and market. A growing trading network has flowered for years through the harbor of Hamburg and the connecting station Duisburg.

Geopolitics bring them close together as well. Germany is awakened as a European power and does not wish to further operate in the shadow of America. China is the emerging power searching for partners to balance the American hegemony. What is important: There are no major internal conflicts, which gives their alliance room to grow.

Their collective rise gains momentum with Trump’s elections. America has surrendered two batons of the global order. America was always an advocate for a free market, which is something Obama wanted to redeem with the great free trade agreements TTIP and TPP. The vacuum Trump created is now quickly filled by China. Everywhere in Asia you can see China’s influence grow, from railway tracks in Kazakhstan to electricity in Pakistan and infrastructure in Indonesia. The entire continent looks towards China for a trade agreement that should replace TPP. Even the Philippines, South Korea and Japan (a classic American ally) turn more to China.

In addition, America was always at the forefront in the fields of progressive values such as freedom, democracy and human rights. Since Trump, that baton has been handed over to Germany. Merkel has become the worldwide champion in combatting climate change and establishing a humane refugee policy. Think of, for instance, on privacy on the internet, a more social form of capitalism and the peaceful solutions to conflict: Germany now takes the lead.

A growing German-Chinese axis should be big news. For centuries, the Silk Route was the most important economic vein of the world. It connected Europe to China across the Eurasian plain. That route is steadily revived from both sides.

However, is Germany strong enough to stand next to China? Probably not. Tensions about Chinese investments in Germany and limited access to the Chinese market could suggest that Germany is only powerful in European context. In this context, the old Silk Route also offers a valuable lesson.

In the beginning of the era, two great civilizations existed along that route: The Roman Empire in Europe and the Han Dynasty in China. These two civilizations did not know much about each other, but the Roman Empire would have been known by the Chinese as ‘Daqin’. ‘Qin’ is the name given to the first dynasty China united, and ‘da’ means ‘grand’. The name implies that the Chinese regarded then Europe as equals. That could happen in the future again. The question for us is what role the Netherlands shall play in this new trading network. Do Rotterdam and Amsterdam lie on the route?

To read the article in Dutch, click here.