Football, panda diplomacy at G20 summit

opinion July 17, 2017 01:00

By Suwatchai Songwanich
Chief executive Officer,
Bangkok Bank (China)

Unlike last year’s G20 meeting in Hangzhou, China stayed out of the limelight at this year’s G20 summit in Hamburg as the media focused attention on the meeting between the US and Russian leaders.

For President Xi Jinping, however, this was probably not a bad thing, as it meant he wasn’t tackled on awkward issues such as the border conflict with India, or human rights concerns, but could concentrate on building China’s reputation as a champion of an open world economy.

The summit was also an opportunity to strengthen China’s European ties, particularly with Germany, and this was reinforced by a state visit by President Xi to Germany just prior to the summit. This followed just after a May visit by Chinese Premier Li Keqiang, reflecting Germany’s importance to China.

In addition to their strong business ties, Germany and China share common interests on the global stage, such as trade openness, cooperative action on climate change, and economic development in Africa. The Brexit vote, the US withdrawal from the Paris climate accord and its leanings towards trade protectionism makes it natural for Germany and China to draw closer together and it may strengthen their positions as leaders on the global stage.

However, there are tensions in the Sino-German relationship. In recent years, Chinese investment has been pouring into Europe, especially Germany, and these are becoming controversial, especially Chinese acquisition of the cutting-edge robotics firm Kuka last year. As China has been moving its economy away from labour-intensive low-value production toward higher value-added manufacturing there is a risk that Europe may lose its advantage in key industrial technologies. German Chancellor Angela Merkel is also critical of the barriers German companies face in accessing the China market. 

To address these issues, China and Germany are working towards an investment treaty and during Xi’s state visit various agreements were signed such as cooperation in aerospace and intelligent manufacturing. This will support both Germany’s “Industry 4.0” and China’s “Made in China 2025” – an indication that they perceive there is room for both to be industrial leaders on the world stage. Chancellor Merkel once again expressed her support for China’s Belt and Road Initiative. 

“China has become a more important and strategic partner,” she said, “We are living in times of global uncertainty and see that we have a responsibility to expand our partnership in all the different areas and to push for a world order based on law.”

It wasn’t all such serious business during President Xi’s visit to Germany as he and Chancellor Merkel inspected two new giant pandas at Berlin zoo and watched a football match between Chinese and German youth teams. On the other hand, it could reflect the new style of their global leadership – of football and panda diplomacy.