China Deal Exposes Germany’s Power


The investment deal with China was not popular with many Europeans. But it was popular with one critical country: Germany.

Germany dominates European Union trade with China. The EU does €500 billion (us$607 billion) in trade each year with China, with Germany responsible for over €200 billion of that. German businesses are most enthusiastic about the investment opportunities this deal opens up.

Germany pushed the deal through in its final days as the rotating president of the EU, in spite of criticism from several other European governments. Politico wrote that officials of these nations “said they felt steamrolled by [German Chancellor Angela] Merkel and the ‘German engine’ inside the European Commission” (January 1).

“Is this the way the EU will work post-Brexit?” one diplomat asked. “The Brits are just out and we’re already missing their open market-oriented approach. If Germany weighs in too much, smaller EU countries have nothing to say.”

The deal is not popular with European voters. “Public opinion was very disillusioned with the Chinese regime,” Harvard Kennedy School research fellow Philippe Le Corr said. “And now we have this deal, which is mainly designed to please a handful of German multinational companies.”

As the EU negotiated with China, key discussions took place in a video call between Xi Jinping, EU officials in Brussels, Ms. Merkel and French President Emmanuel Macron. Other countries were angry at being left out. The unusual meeting format reveals the real power structure in the EU: Germany leads, France has a voice, and no one else really matters.

“This isn’t just another deal with some small country,” Politico quoted an anonymous EU official as saying. “The way we position ourselves in the U.S.-China dynamic will make or break the EU” (op cit). He’s right. This deal sets the direction of European foreign policy. Even with a Biden administration, Europe is choosing China over America. And almost no EU countries have any say.

For decades the Trumpet has warned that a strong German leader will dominate Europe. The China deal shows how much Germany dominates Europe already. Ms. Merkel isn’t known for steamrolling people—yet here we are.

How much more dominant will Germany be once that leader arrives?