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EIB chief lashes out at German naïveté on Chinese buyouts

EIB chief lashes out at German naïveté on Chinese buyouts

by host

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The head of the European Investment Bank has a big question for Germany: What on earth are you thinking by allowing China to buy your port?

Werner Hoyer, the bank’s president, on Wednesday made a pointed attack on Berlin for failing to learn from the mistakes of overdependence on Russia, and said Europe now needed to act decisively to keep core power and transport infrastructure out of Chinese hands.

His remarks came just days after Berlin agreed the sale of a 25 percent stake of a terminal at the Hamburg port — Germany’s most strategically important — to Cosco, a Chinese state-run shipping line. German Chancellor Olaf Scholz also took a business delegation on his maiden visit to Beijing to meet President Xi Jinping, saying that Germans “don’t want to decouple from China.”

Scholz has been widely crticized for not stopping the port sale, while his government on Wednesday blocked the sale of a German semiconductor company to a Chinese investor.

“We cannot be naive in thinking that we will retain sufficient control over our critical infrastructure if it is in the hands of autocratic rulers,” Hoyer said in a speech at the Konrad Adenauer Stiftung think tank. “Our critical infrastructure — power grids, gas storage facilities and distribution networks, communication networks, ports, railways and roads — are all of strategic importance. They should never fall into the hands of Russia or China.”

Hoyer was also categorical that the West’s political model was under threat.

“For far too long in Europe, and especially in Germany, we have been under the illusion that after the fall of the Berlin Wall, Western liberal democracy would forever triumph, and would become the model of society for the whole world,” he said.

Chinese state-run companies have also taken over ports in the Netherlands and Belgium, as part of China’s Belt and Road Initiative, a massive transport infrastructure scheme to link Chinese factories to Western markets.

Digital connectivity has been another major concern, with France, Germany and other NATO countries slow to implement dragged-out plans to phase out part of the Chinese components — most commonly from Huawei Technologies — from their telecom networks.

“Unfortunately, green and digital innovations in Europe also face dependencies that we cannot lose sight of … We source a large portion of our lithium from China, although some deposits can also be found in Europe, for example in the Rhine Rift Valley,” he said.

Werner is a former German minister affiliated to the liberal Free Democratic Party, which is the smaller of the two junior parties to Scholz’s coalition government. The FDP, together with the fellow junior Green Party, is known for its tougher line on China than Scholz’s Social Democratic Party.

He also lashed out at the former Chancellor Angela Merkel’s approach.

“Under Germany’s leadership, Europe allowed the strategic port of Piraeus to be sold to China during the euro crisis,” he said, referring to a 2010 decision. “Since then, Xi has repeatedly declared that he wants to overtake the United States as the world power and gain economic control not only over Africa and Asia, but also over Europe.”

“Under its ruler Xi Jinping, who consolidated his power at the recent party congress, China sees itself as the more efficient model of wealth creation precisely because of its authoritarian leadership. Since the mid-2010s, the country has been moving to create dependencies worldwide through the construction, operation and control of critical infrastructure,” he said.

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