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German elections: What's in store for China after Merkel?

Coalition math will determine whether Beijing will face a less friendly Berlin

Either Armin Laschet of the conservative Christian Democratic Union, left, or Olaf Scholz of the center-left Social Democratic Party will likely become Germany's next chancellor. Who they pick as coalition partners will like determine the country's stance on China. (Nikkei montage/Reuters/AP)

HAMBURG, Germany -- After 16 years of relatively warm ties with China under Angela Merkel, Germany will vote later this month in an election that will determine who will take over as chancellor and set the course for relations with Beijing.

Voters will on Sept. 26 elect a new parliament, the Bundestag, which in turn will pick Germany's next leader. Chinese officials will be watching keenly as Germany is its most important partner in the European Union, with a mutual trading value of 212.9 billion euros ($251.6 billion).

Depending on some complex coalition mathematics, the next chancellor is likely to take a less Beijing-friendly stance than Merkel.

Two candidates with realistic chances of winning: Armin Laschet, of Merkel's conservative Christian Democratic Union (CDU), and Olaf Scholz of the center-left Social Democratic Party (SPD).

The SPD came top of a compilation of polls published by German daily Der Spiegel on Tuesday with 26%, ahead of the CDU (22%), the Greens (16%), the pro-business Free Democratic Party (12%), the rightwing Alternative for Germany (11%) and the Left Party (6%). The next chancellor will, therefore, likely be crowned in a coalition arrangement, with either Scholz or Laschet being supported by both the Greens and the FDP.

The probable scenario of having the Greens and the FDP in government would likely strain Germany's ties with China as both have been much more critical of Beijing than the Merkel administration. Since being blasted by Chinese officials for visiting Hong Kong before Beijing on a 2019 trip, FDP leader Christian Lindner has written several opinion pieces critical of Merkel's China stance.

"Laschet and Scholz would not be very different in their China stances from Merkel, with Scholz having earned a long track record of pragmatically fruitful exchanges with China when he was the mayor of Germany's largest port city Hamburg," said Ariane Reimers, a senior fellow at Merics, a China think tank in Germany.

"But, with the FDP's Lindner striving to become either finance minister or economics minister, and the Green's Baerbock possibly eyeing the foreign ministry, we will likely arrive at a configuration that pushes the chancellor to be significantly more critical of China," she added.

China's President Xi Jinping shake hands with German Chancellor Angela Merkel at the Great Hall of the People in Beijing in 2018.   © Reuters

Another possibility is a left-wing coalition led by the SPD and supported by the Greens and Left. While the Greens and the Left agree on issues such as minimum wage and child benefits, they have contradictory China stances. The Left slammed the recent dispatch of a German navy frigate to the Indo-Pacific to support the U.S. and its allies against Beijing's territorial claims, and the Greens criticize Left for being too cozy with the Chinese leadership and Russian President Vladimir Putin.

"The Greens are Germany's most China-critical party, and Left is Germany's most China-friendly party, and no chancellor would like to form a government with both of them," said Thorsten Benner, the director of the Global Public Policy Institute in Berlin.

"The next government will stick to Merkel's recent shift of foreign policy attention to the Indo-Pacific, stepping up cooperation with like-minded countries there," he added, referring to the policy guidelines for the region announced by the Merkel government earlier this year.

German business is also paying keen attention. The CEO of a major German home textile-maker recently told Nikkei Asia that he fears a strong role of the Greens in the new coalition could lead to higher carbon taxes that will reduce the competitiveness of Germany-based manufacturing to the benefit of foreign rivals, including those in China.

The stakes are also high for German automakers such as Volkswagen, Mercedes-Benz and BMW, which sold between 35% and 40% of their cars in China last year. One observer warned that CDU's candidate Laschet's ties to ultraconservative Catholic circles could run counter to the interests of automakers, stirring memories of former U.S. President Donald Trump's trade war with China being cheered on by evangelical Christians in America.

"All in all, we can say that with Laschet and Baerbock it would become more difficult to manage our relationship with China, Laschet being too religious and Baerbock being too ideological," Ferdinand Dudenhoeffer, the director of the Germany-based CAR-Center Automotive Research, told Nikkei Asia.

"The SPD and Scholz will have better chances to manage this relation that is so important for us," he added.

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