Germany's Scholz, China's Xi talk Ukraine war, economic protectionism

On the final day of a three-day trip to China, German Chancellor Olaf Scholz has met with President Xi Jinping in Beijing to discuss economic cooperation and geopolitical flashpoints, with a focus on the Russian war in Ukraine.

After more than three hours of talks, Xi appealed to all parties in the war to contribute to easing tensions "instead of pouring oil on the fire."

China is neither a party nor a participant in the Ukraine crisis, said Xi, who has friendly relations with Russian President Vladimir Putin.

However, the Chinese leader did not promise Scholz that he would attend the peace summit in Switzerland planned for June. He would only support such an international conference if it was accepted by both Russia and Ukraine, according to an official statement.

Russia has rejected an invitation to the conference.

China, a nuclear power with a population of 1.4 billion, is considered Russia's most important ally, but has so far made little use of its influence on the conflict.

At the beginning of the talks, Scholz had urgently drawn Xi's attention to the devastating effects of the war.

"Indirectly, they damage the entire international order, because they violate a principle of the United Nations Charter: the principle of the inviolability of state borders," the German leader said.

"The Russian war of aggression against Ukraine and Russia's armament have a very significant negative impact on security in Europe."

The West accuses China of supplying Russia with goods that can be used for both civilian and military purposes, thereby supporting the Russian war economy.

Scholz and Xi spoke for a total of three hours and 20 minutes - an unusually long time. They first spoke for an hour in a large group, followed by a 45-minute tea ceremony in private and finally a meal.

With this in mind, Xi is said to have used a parable alluding to the resolution initiatives in the Ukraine war: Everyone should sit at the table, but no one should be on the menu.

Scholz and Xi once again agreed that no nuclear weapons should be used.

This commitment by Xi was the great success of the chancellor's inaugural visit in November 2022. There was initially no sign of any comparable agreement on Tuesday.

Xi spoke of a "new era of turbulence and upheaval," in which the risks for all of humanity would increase, according to an official translation.

"To resolve these issues, it is essential that co-operation between the major powers gains the upper hand," Xi said.

Scholz and Xi emphasized that, despite differences, they wanted to expand economic cooperation. "We do not want to decouple from China," Scholz emphasized several times.

The Chinese leader urgently warned against economic protection measures. Germany and China both depended on industry and supported free trade, Xi said, according to the official statement.

"With this in mind, both sides should be wary of the rise of protectionism." The European Commission is currently investigating whether the sale of Chinese electric cars in Europe is being improperly subsidized. Xi's statements are probably aimed at this.

Later on Tuesday, Scholz also spoke at length with Chinese Premier Li Qiang.

The two spoke about "fair competitive conditions," equal market access, the protection of intellectual property and the need for a reliable legal framework, the chancellor said.

Li defended China's green energy subsidies against accusations of unfair competition. "Regarding people who say that the dominance of China's renewable energy industry and so on has come about through subsidies, I think this view does not correspond to reality," Li said on Tuesday evening in Beijing after his meeting with Scholz.

Industrial subsidies are common practice around the world, including in Europe and the United States, Li added.

Tensions over subsidized Chinese export goods on foreign markets and industrial overcapacity have been a major concern of Europe and the US.

They say Beijing's state investment keeps prices artificially low, which puts their domestic firms at a disadvantage.

Berlin and Beijing also struck an agreement to cooperate on autonomous driving. German State Secretary for Economic Affairs, Franziska Brantner, and Transport Minister Volker Wissing signed a declaration of intent with the Chinese side in Beijing on Tuesday.

The two countries also intend to intensify their work on resource efficiency and creating a circular economy in the next five years, as per an agreement signed by Scholz and Environment Minister Steffi Lemke on Tuesday.

Scholz began his trip to China, the chancellor's second since taking office in 2021, with a visit to Chongqing, the world's largest city, followed by a stop in Shanghai where he met representatives from German businesses and the German Chamber of Commerce Abroad in Shanghai to discuss the problems companies are facing in China.

Some of the 5,000 or so German companies that are operating in China have complained about facing disadvantages compared to their Chinese competitors, more difficult market access and legal uncertainties.

The German chancellor is accompanied by a dozen chief executives, among them the bosses of car manufacturers Mercedes-Benz and BMW, as well as the chemical company BASF. Volkswagen, Europe's largest car manufacturer, is not represented this time.