tv Quadriga - The International Talk Show LINKTV May 25, 2018 7:00am-7:31am PDT
♪ peter: hello, and a very warm welcome indeed to "quadriga." this week, as german chancellor angela merkel visits china, we take a closer look at beijing's geopolitical ambitions. president xi jinping has established himself as china's leader for life, and he seems determined to transform his country into the dominant global power. it's already challenging the u.s. as the world's biggest economy, and now china is extending its strategic and commercial influence through the creation of a giant trading network known as the new silk road. so, our question on "quadriga"
this week is, "the new silk road: china's route to europe?" and to discuss that question, i am joined by three excellent analysts here in the studio, beginning with bernhard bartsch, who is a senior expert on china for the bertelsmann foundation. he believes that "time to balance china's influence in a reasonable way may be running out." so with us is andreas kluth, editor in chief of "handelsblatt global." he was once based in hong kong, and has for many years followed the rise of china. andreas says that europe should stop being naive. "china has a plan for economic domination of the eurasian landmass and seas." and a very warm welcome too to ruth kirchner. ruth is a freelance journalist and china expert. she argues that "china's belt and road initiative is a good idea in principle," but she goes on, "it lacks transparency and ties participating countries into an authoritarian system." thank you all three for being here with me today. i would like to begin with you,
andreas. a big statement at the top of the show. you say that china has a plan for the economic domination of the eurasian landmass and seas. how close is beijing to realizing that goal? andreas: beijing has a long time horizon, which is one of the things that distinguishes china from the western democracies, and it also looks far back. in the chinese narrative, china once was the economic superpower of the world. in our middle ages, the tang dynasty and onwards. then came the great humiliation at the hands of the west, when the western countries, through the industrial revolution, passed it by and left it behind. peter: very important for the chinese psyche. andreas: yes. and they dwell on it today. to an extent that it is surprising to us, the opium wars and whatnot. but in their narrative, it is now all about reestablishing what is rightfully theirs, which is economic power alongside other powers. i think economic dominance eventually, and to translate
that economic power into political power. for that, they have, unlike the west, a coherent plan that has elements like the new silk road, the targeted theft and transfer of technology, and more. peter: ruth kirchner, are we already living in the chinese century? ruth: no, i don't think we are already living in the chinese century. what i think we are witnessing is a shift of power centers away from the u.s., but i don't think this is china centered yet. but china is going to play much more dominant role in the future. peter: a more expansive role? ruth: a more expansive role, definitely economically, and we see that through grand schemes like the one belt one road initiative or the belt and road initiative, as it's now called, in china. where china wants to move politically and strategically, i think that is still a much more
open question, we are not quite sure yet. peter: and bernhard bartsch, you say time to balance china's influence in a reasonable way. in a reasonable way, it is running out. what does that mean? bernhard: if you look at what's happening in the u.s., where scapegoating china for taking america's jobs away has become a dominant political theme, then that is quite a dangerous, populist path to take in europe. in europe we can be happy we are , not there yet, but of course, china poses a lot of challenges to the global trading system, global governance, and a has to -- there has to be a lot of negotiations for what the global world order is going to be. until we can still discuss reasonably, and if we don't have populist movements and politicians who campaign on scapegoating china for our problems, there is still a chance for good diplomacy to work things out. peter: when you talk about
scapegoating china, you at the bertelsmann foundation, you have a new report looking at china buying up high-tech, high and companies around germany and europe. that is viewed as a threat by many people in germany, because they believed the chinese -- it's the cliche, isn't it? they believe the chinese are going to copy, reproduce, and leave the europeans lying in the dust, or is it more complicated than that? bernhard: it is more complicated than that, because china is now openly saying they want to become world leaders in core technologies in the next couple of years. what our report shows is that they are very strategically by -- buying german and other european and western technology companies. the problem is that our markets are very open. they are basically welcome to invest here, while their markets are closed and closing even more. the problem is a level playing field. peter: this buyout you have been identifying and writing about, it takes place with state
backing, so it makes for an unfair playing field. bernhard: absolutely. we don't know the ownership structures. there is state money in there. it's tied to this big plan, made in china 2025. we are all for competition. that's what the german economic model is built on, but china is very much on leveling the -- un-leveling the playing field. that kind of manipulation is a big problem for german industry. andreas: yes, if you just want to spell out that point about the unlevel playing field, the way in just recent weeks, what the chinese have been doing is they've built a surreptitious shareholding in daimler, a chinese company has bought it up without acknowledging it at the , proper time, a stake of about 10%. that's one of the technologies they are after. right now, they are having a second attempt by into an
electricity grid operator that is also quite strategic. i liked what you said come in america, it has gone too far. the populists, trump, has taken the debate. it hasor some reason, not entered the populist bullhorn yet, but i believe in germany, for instance, most people are unaware of this, but the new economics minister, it's now his job to think calmly but firmly about this. the thing on his desk is right now the chinese are trying to buy into the electricity grid operator again. intervenees, he could once they get 25%. they stopped just short of that at 20%. he has a few weeks to decide. he does not want them to have it. what does he do? that's the dilemma. we have rules and they cannot change that quickly. they just do whatever they want. peter: at the heart of our
discussion today is the new silk road project.it is a massive transport and trading initiative . are two main routes. one is the land route from china and across central asia, the middle east and russia, into eastern europe before reaching germany. there's also a maritime route that links south china with east africa, also leading to europe. let's find out a little bit more about what may well be the largest infrastructure project in history. ♪ announcer: chinese president sheikh was joined by representatives from more than 100 countries last year, at the silk road settlement in beijing. among the participants, turkish russiant erdogan and president vladimir putin. not in attendance was angela merkel. the new silk road project intends to do much more than revive the old trade routes. with an investment of $900
billion, china wants to build an almost global trade network with roads, railways, ports, and airports. it would connect china with central asia, africa, and europe. but alsot business, about establishing influence and political power. in germany and most other european couries, there is still a feeling of mistrust. the u.s. does not sign a declaration. adherey china does not to environmental and sial standards. china is advancing west, but who will be using the new silk road? kirchner, who will be using the new silk road, and is it a threat or opportunity? ruth: i think it's a bit of both, really. it's an opportunity for a lot of countries that desperately need investment, both in asia, central asia, and some parts of europe, and of course come in africa. peter: that all sounds very benign. ruth: the idea as such i think
it's been nine and perfectly understandable to actually improve transport and connectivity across those regions. i think what we need to look at very carefully is individual projects, and who is benefiting, who is financing these projects, who are the companies or where are they from? mainly from china. where does it leave the country's better involved in these projects -- the countries that are involved in these projects? does it lead to higher death levels? are these projects really beneficial to the countries that sign up to it? of sound ates kind times like the british building trains in india. bernhard: they would definitely say they are not colonial. but when we look at it, it is definitely a geopolitical project. it is not only about trading and
tilting infrastructure -- building infrastructure. the second step is building political influence, and basically reshaping the world order around the countries that join the new silk road. right so you feel it was and good for angela merkel not to have attended the silk road summit? challenge here is that we have to take up china's offer to say that this is the multilateral project, because this would be a good idea. in theory, it's a good thing, but in practice, until now, it is not. the challenge here is to work with china, because we need china as a partner. we are not going to contain china in any way. we shouldn't. at the same time, we have to acknowledge that china has a very strong strategy there where we have none. we don't have similar offers we can make to emerging economies,
telling them we can help you to build power stations, networks, train networks, in a similar way. we have to be more receptive to their needs and come up with an alternative, and only if we have an alternative, and it is actually in the german coalition treaty that we need a european alternative to the silk road -- only then can we put pressure on china to level the playing field, and make it a truly multilateral deal. ruth: the problem is a lot of these projects can be both. they have a strategic aim, but they also have economic benefits. if you build a harbor for a country, that's good for trade, but you could actually also use it for other purposes, military for instance. i think part of that is that we never quite sure what we are talking about, and on the chinese side, there's a lack of transparency. peter: and it's also about
values. we used to navy and the west assume if there trade, there's commerce, and markets, and the byproduct is democracy. that has proven to be rather naive, to put it mildly. andreas: absolutely. that mixture of economics and politics, i don't think the chinese seek -- see a distinction. i just want to say in the same places where they are building belt,ad, as well as the that overlaps with, for instance, the south china sea, where they are deliberately trying to get america -- they have a strategy of extending the perimeter to which they can project chinese power and prevent american power from being projected. in the south china sea, they are turning small islets into permanent aircraft
carriers. they are happily picking off the philippines and other countries that were in the american or western orbit. it's difficult for countries like new zealand and australia in the long-term, bringing them into there are rich. -- orbit. that is something we were not used to having. to shift the focus a little bit. we are talking about two things here, china's strategy, but also angela merkel's visit to beijing, which is currently taking place. i think it is her 11th visit in 12 years in office. diligent, very committed. how is she seen in china? is she an important voice? bernhard: i think at the moment china is quite willing to listen to germany and europe, because they need europe, or they help europe could play a role to balance the u.s. veryhen there are long-standing personal connections.
at the same time, china is very realistic about what they can do .ith european countries yes, they need angela merkel as the leader of the strongest european country. at the same time, they are doing a lot to drive european countries. peter: i would be interested for your thoughts on that, ruth. thinks china only pure's europe as a peripheral asian peninsula. is it that bad? realisticink it is about the role germany can or cannot play, and germany is the biggest economy in europe, it is the most important country within the eu, but from the chinese perspective, it is still a relatively small country. i think the chancellor is realistic about how much weight she actually has. germany hasat economic power, but when it comes to the big geopolitical
questions, germany's voice counts a lot less. i think that has to be taken into account. peter: we are certainly discovering, because we talked about differences between europe and china, there is certainly a lot of common ground? ruth: there is, and there isn't. trade, boths to countries, neither china nor riffsny or the eu, want ta left on their exports and goods. also, germany and the u.s. have common interests vis-a-vis china when it comes to markets access and economic policies in china, and what both of those countries want to see changed. i think that puts chancellor merkel in a difficult position. on the one hand, she wants to keep communication channels with the u.s. open. germany needs the u.s. china and the u.s. are germany's biggest trading partners.
she also wants to carry on with a very good relationship with to be but does not want seen that she's being pushed into china's arms because of the conflicts with the americans. bernhard: absolutely. that's right. andreas: i have two fears about this. one is, first of all, i do think it is as bad as the quote suggests. from the chinese point of view, europe is a little appendage at the end of asia. i think that europe could become, in this century, ruled takers, not rule makers. the second fear is that the chinese might clash with the waning superpower, which is america. i was really intrigued when i speaking toars ago, young scholars inside the chinese communist party. what they wanted to talk about is historical clash between britain and germany in the 19th century. that was the british century, and germany rose to build its place in the sun, and led to
eventually world war i, which they wanted to avoid, the chinese. i would be interested if they still are as keen to avoid that permanently, or if they just want to avoid it until such a time as when they think they can win such a showdown with the u.s. i think it's actually a theerous world, and i think 19th century was british, the 20th was american, and this one, just starting, will be chinese. peter: very interesting thoughts indeed. let's go back to the new silk road. we have seen the western german -- thisdeutsche bank western city in germany as the end of the road. after 11,000 kilometers, one trade route of the new silk road ends here. trains arrive with goods and hope for the future.chinese investors are very welcome here.
we will be building a china trade center here. on this land behind us, we will have 120,000 square meters of office space over five stories. that's appealing to a region with high unemployment. the coal industry lost tens of thousands of jobs last year. europe'slso one of largest in land ports, an ideal hub to forward goods. but how reliable is china as an investor? bernard, -- bernhard bartsch, that's a good question. how reliable is china? they could be engaging in massive overstretch here. bernhard: if you look at it from a german perspective, then they are not very big investors yet. they are strategic investors. silk road, at the
they have a lot of money to spend, but they can't buy the world. they will need other countries to support the initiative. i think that's the main challenge. it is not only about money. we should not only look at the spends, we area also spending a lot of money. the west is spending a lot of money. it's not like china invented building bridges and roads and developing countries. maybe they invented that 5000 years ago, but right now they are doing with the world bank and a lot of other development agencies have been doing. peter: it's interesting, because china, in advance of merkel's has been complaining itself and asking, how reliable is germany as a trading partner? china points to a protectionist trend in germany, saying only 0.3% in frying -- of foreign investment stems from china.
the charge is economic exchange cannot be a one-way street. [laughter] andreas? andreas: this is outrageous. cynicism. peter: this is the chinese ambassador to germany speaking out. andreas: they have gotten quite good at rhetorical red herrings. you shape the debate in advance. he was posing as the protector of trade suddenly. this is very cynical. those billions of german investment and the many other billions of american investment in china, we could talk about that. what happens? there are strict laws.they have to form joint ventures with local partners /there are -- partners. there are stories of having joint ventures, factories where tired, soees looked one day the german bus drove home to zero they are going, and they are going to an identical rectory at night -- factory at
night, re-creating what they make during the day. they have used the investment into china to, i would say, steel and transfer and copy, and then approve on key technologies. there is so much wrong with that allegation. i don't even know where to start. i think we shouldn't fall for it. ruth: if you look at the openness of both markets, the european market and the chinese market, it's very clear. the eu market is very open to foreign investment. a lot of the investments that are happening here would not be possible vice versa, because the chinese are protecting their own industries, and don't have the same openness in their investment rules or regulations as the europeans. quotes by the they werebassador,
designed to steer the debate in a certain direction. it is very hard to take that seriously. peter: and how much divide and rule is there in the chinese strategy? we are certainly seeing an element attempting to drive a wedge between eastern european countries and western european countries and brussels. ruth: i think there is a certain amount of divide and rule. part of it is that the europeans allowed this, or let it happen. there are very different interests in different parts of europe. there are some countries that definitely want to -- want chinese investment. other countries like germany do welcome chinese investment of sorts, but have become a bit muchwary of it, and are keener on screening chinese investments a bit more carefully. i think the challenge here for the europeans is to come up with andint strategy, as always,
go about the challenge. bernhard: make it specific one of the big discussions at the moment is, how are we going to monitor and control investment in europe? that is something that, by european law, we have to decide in brussels. china is there is that very strongly represented, especially in eastern european countries. china is in fact sitting at the table, and has its allies, who are going to sabotage some of these initiatives. peter: are you going to name some names for us? bernhard: hungary is the country that is very much discussed at the moment. there was coming back to the silk road. there was a famous report by european ambassadors in beijing who made a report about how this new silk road is a very china
dominated, and very manipulati ve initiative, and the hungarians were the only ones who did not sign the report and did not share the concern of his colleagues. peter: we are running out of time. i would like to get an answer to the core question. is china coming to europe? andreas: yes, of course. they are already here. it will be a chinese century. we have to get used to it. ruth: they are already here. [laughter] they are here to stay. we have to think carefully how to deal with them. bernhard: they are here. it is good they are here. they are welcome that they are here. we can't out chinese the chinese, but we want to be there, too, and we want a level playing field. peter: thank you very much for that and all of your thoughts today. thank you for being here on "quadriga." the topic has been the new silk road, china's route to europe. goodbye. ♪
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