Economy Minister Peter Altmaier struck a very different tone from the Americans.

By Jakob Hanke

6/21/19, 6:08 PM CET
Updated 6/22/19, 6:37 AM CET

SHANGHAI — Amid a full-blown trade war between Washington and Beijing, Germany's Economy Minister Peter Altmaier made an impassioned plea for the EU to work with China.

During a three-day trip that came at a crucial moment ahead of a summit of the G20 leading economies in Osaka next week, Altmaier set out a vision for cooperation, radically opposed to Washington’s warnings of a new Cold War.

"We have a shared responsibility to prevent new conflicts from arising in the world. To prevent trade conflicts, protectionism, mutual sealing-off that limit these forces for [economic] growth," Altmaier said in a speech at Tongji University in Shanghai on Friday.

The German minister robustly defended China’s "right" to get rich, export its goods and set out its strategic interests in plans like the “Made in China 2025" strategy. He criticized America’s sanctions against the Chinese telecoms giant Huawei, and even suggested that Europe should copy some of China’s “very rational” plans like an industrial strategy and "One Belt, One Road" infrastructure plan.

Indeed, in recent months, Germany has increasingly swung behind an (more traditionally French) approach to an EU industrial strategy and has called for greater emphasis on forging European champions. Most conspicuously, Berlin has reacted with annoyance to the decision by EU antitrust regulators to block a rail mega-merger between Alstom and Siemens.

Despite the conciliatory tone of his speech, Altmaier has had to tread a fine line on his visit. He tempered his praise of China with a warning that Beijing should not crack down against protesters in Hong Kong, and also told top Chinese officials to rein back lavish state funding for business — observing that "the state is a bad entrepreneur."

Still, he stressed more grounds of cooperation than conflict. While the U.S. has criticized European countries such as Italy for joining in with China's massive Belt and Road project, Altmaier had more time for the transport and infrastructure program that connects Asia with key European hubs.

Europe, he said, “needs a connectivity strategy that encompasses everything from internet to the transport of goods ... and if we talk with China, then we can join forces and share the burden, which will automatically guarantee that there is no discrimination, no one-way road but a two-way street and that would be the best solution."

A social model

Drawing on Germany's own experience of rapid reconstruction after the devastation of World War II, Altmaier called on China to use its new-found economic might to build a more robust social safety net. His speech at Tongji University made a broader case for a “social market economy” that he said could lead to worldwide prosperity “within one or two generations.”

Altmaier suggested that the case for more economic — as well as political — openness could only be made by convincing China that opening up is in its own best interests.

“After the Second World War ... in Germany, the market economy model was disputed until Ludwig Erhard took the courageous step of introducing the social market economy. And this has led to an economic miracle that has been going on for 70 years now.”

Altmaier argued that this model united both European and Chinese values. China is “expanding its health coverage” and other social benefits, he said, adding that Prime Minister Li Keqiang has assured him China would continue expanding its social safety net.

“Prosperity,” Altmaier said, “should not be granted only to a few in the upper class but for the broad middle of society.”

The discussion with the students was titled “Social market economy — a model of success for democracy, social equality and prosperity” and the minister sought to give the Chinese students a taste of democratic debate during the event, encouraging them to ask critical questions.

One promptly asked, in fluent German, about whether Huawei would be granted market access in Germany.

Altmaier sugared his response with some flattery.

“Let me first give you a compliment,” he told her. “Your German is extraordinary. The German chancellor has said she will in a few years no longer be a candidate for that office — maybe you will move to Germany ... and one day become chancellor too.”

He then got down to business, and replied that Huawei should be treated “according to the rule of law” and criticized Washington’s decision to put the company on a sanctions list. “Rule of law means that every company must be able to trust that it will be treated according to the law, and that no arbitrary decisions are taken.”