German Chancellor Angela Merkel visits China from May 21 to 23 at the invitation of Premier Wen Jiabao. It is her first trip to the country since she took office last November. In an interview with Beijing Review publisher Wang Gangyi shortly before Merkel's visit, German Ambassador to China Volker Stanzel talked about Germany's policy toward China and current Chinese-German relations.

Beijing Review: What is Chancellor Merkel's China policy?

Volker Stanzel: Chancellor Merkel said right after taking office that continuity would be a focus of her China policy. "Continuity" does not mean keeping German-Chinese relations on a level base, but continuously increasing the intensity of the relationship. It means increasing the speed of development of our relationship politically, economically and culturally. In fact, this is what we have experienced during the last two decades.

Second, the two parties forming the current German federal government agreed in their coalition agreement to attach great importance to developing relations with rising countries such as China and India. It is important to take them into account in our global strategies. So, there are two aspects to the new German government's policy on China: One is continuity and the other is to explore new areas and opportunities.

What is the main purpose of Chancellor Merkel's visit to China?

It provides the first opportunity for the chancellor to meet Premier Wen and to have an extensive person-to-person exchange with other Chinese leaders. I think the first purpose of Chancellor Merkel's visit is to meet Chinese leaders in person to promote bilateral relations and to identify the fields where the two countries will work best together. The second purpose is to reassure the Chinese leaders and the general public in China of her strong will to continue developing German-Chinese ties.

I think it is really necessary for the two sides to get to know each other well if we want to successfully develop our relationship. We have been doing many things together. Politically we have very intensive and close consultations. We have regular and quite intensive exchanges through many mechanisms. Thus, I believe continuity now means increasing the intensity of our cooperation.

Economic cooperation certainly constitutes an important part of Sino-German relations. Have there been any new developments in the financial sector, the technological sector, such as the magnetic levitation train, and the cooperation between small and medium-sized enterprises (SMEs) of the two countries?

In the financial sector, we cooperated very well at the G-20 meetings in 2004 and 2005. There are many other countries that want to promote financial cooperation with China. So it is not just for China and Germany to push forward cooperation in the sector.
 
There are also many other international arenas where China and Germany are working together extremely well.

In the technological sector, the maglev train stands out as an example, as there already is a line running successfully in Shanghai. I believe the Chinese State Council now has made a basic decision to extend the line from Shanghai to Hangzhou. Two German companies and their Chinese partners presently are negotiating on how to implement the decision. It will take some time to sign the final contract. It will be a big one.

And then, consider the density of our bilateral economic relations: There are 2,600 German companies engaged in China, 80 percent of which are SMEs. At the same time, we observe that more and more Chinese SMEs are seeing Germany as an interesting place in which to invest. Presently, 600 Chinese SMEs are doing business there -- Chinese restaurants excluded!

You have said the target of doubling the volume of bilateral trade by 2010 from the 2003 level is somewhat "conservative." Why is that, and what is your current projection?

If we look at the speed at which our bilateral trade is developing, I cannot say we will only double the volume by that time. Industry federations and companies in Germany feel that there are huge opportunities for a more rapid increase. I would say tripling the 2003 volume should be a reasonable target.

What is your government's current position on lifting the EU's arms embargo against China and on recognizing China as a full market economy?

Lifting the arms embargo has to be discussed and decided by the EU. There are 25 countries involved in taking this decision.

Recognizing China as a full market economy is a technical matter. There are a number of regulations that have to be implemented in China. It is not enough to transform them into law. They have to be put into practice. This will be surveyed by both sides and both sides will come to a conclusion. Experts will be looking at it, which I think is a fairly objective way of going about it. While politically it is very desirable to get there as soon as possible, it is a question for experts to decide.

In your speech at Peking University earlier this year, you identified signs of the "crumbling of the international order" and stressed the urgent need to make the "rules of the road" to provide a frame for international competition as well as cooperation. What can China and Germany do together in this respect?

When President Hu Jintao visited Germany last November, he spoke of the notion of "partners in global responsibility." The logic of it I think is obvious. China and Germany, as well as many other countries, see that the old world order, a legacy of the Cold War, has been crumbling and has not been replaced yet by anything that could help us deal with new challenges. Issues that were not considered global 20 years ago, such as nuclear proliferation, the spread of pandemics, economic integration and terrorism, have increasingly become global challenges for the whole international community today. These are negative challenges and we should develop sound strategies for dealing with them. But at the same time, we have positive challenges as well.

Increasing global trade and the emergence of new global centers in East Asia, South Asia and Latin America mean that we have to find new "rules of the road" to deal with more players on the same field. China has been a newcomer on the international stage. Germany has been a global player for quite a long time. Our economic development, our well-being and our influence always depended on international trade and economic relations. We now have to confront the necessity of shaping a new global mechanism. So it is very clear that our two countries should try to work together in developing these new "rules of the road." China has been holding discussions with the US, France, Japan, India and many other countries, while we have been talking with our EU partners and transatlantic partners. What we are doing bilaterally has to be part and parcel of what we are doing with other countries. However, this does not mean that what we are doing bilaterally loses importance. If we find solutions together, it will be much easier to convince others.

The most important area is trade and everything is connected to it. And there are many more important [issues] in the growing economies in every continent. These countries, which are now playing much greater roles than in the past, urgently have to create ways to deal with each other and with the major developed economies. We know that the WTO conference in Hong Kong has not yet managed to develop this system of rules. I think this will remain the primary challenge, the very basic issue we have to handle. Another issue is how we go about dealing with natural resources. Energy is a very important topic between China and Germany. Recently our foreign ministers agreed to put the energy issue at the top of the agenda of the German-Chinese strategic dialogue. The second important item is IPR (intellectual property rights), a central element in the whole question of trade. 

(Beijing Review May 23, 2006)