Chinese people around the world in the reputation of ideas and concepts that have elsewhere demonstrated their suitability to adopt. This is true not only for cars, robots, or trains. On your way to the world’s leading economic power, the Chinese leadership would like to learn also, such as large industrial Nations manage their economic and political problems. Therefore, they did a few years ago, on the German-Chinese financial dialogue.
Since then, officials are studying brakes in the exchange with their colleagues from the Federal Ministry of Finance, the advantages of the German debt and the concept of fiscal sustainability, the Federal government has. Top-level talks are also included. On Friday, Federal Finance Minister Olaf Scholz (SPD) meets in Beijing, the Chinese Deputy Prime Minister Liu He, China’s most powerful man for all economic policy.
40 minutes for the situation of the world economy
It is only the second meeting at the highest political level. The first and last Meeting of this kind took place in 2015. Is accompanied by Scholz in his appointments of Bundesbank President Jens Weidmann and the head of the Federal financial Supervisory authority (BaFin), Felix Hufeld.
According to the agenda, want to take Scholz and his Chinese interlocutors in two hours time. So you will be talking for about 40 minutes about the state of the world economy and on the themes that play in the G20 process, such as the taxation of large digital companies.
It will inevitably come, the recent economic difficulties in China. The country’s exports fell the least sensitive. The US President, Donald Trump has imposed punitive tariffs on Chinese products to show effect. But domestic demand is weakening.
In the Federal Ministry of Finance not to be interpreted to the signs of as a upcoming economic downturn stand to suffer from the because of the sheer size of China, the Rest of the world. The growth losses were, at best, in the order of magnitude of a few tenths of percentage points. In Germany, the development was similar. No need to worry.
China fears of transparency in loans
The two leaders want to be replacing about how Chinese infrastructure investment abroad, often apostrophized as the new silk road, better with the German and European projects coordinated. In this context, Scholz wants to recruit its partners to ensure that China’s accession to the so-called Paris Club, i.e. the merger of state lenders.
Because many of the state’s foreign investments are nothing more than loans to foreign governments with which the Chinese roads, power networks or railway lines in Africa and South America build. The idea behind the German: A membership in the Paris Club would bring more transparency in the opaque financing, because it imposes disclosure obligations. But that is exactly what the Chinese shy away.
fluster of companies investments
a Whole 15 minutes for a topic made in the past few months, for the most Furore: the Chinese participation in German companies. Actually, the Problem does not fall within the jurisdiction of the Federal Finance Minster and would be hardly any topic, if the Federal government would not have aggravated in the last months of the takeover rules, especially with regard to Chinese engagement.
Scholz wants to make it clear in Beijing, that it is a “Lex of China”. Rather, all of the investors were affected from outside the EU that exceed a certain threshold. If Scholz is holding to the German government line, he will point out to his interlocutor that the Chinese should, in turn, be more open to foreign investments.
cooperation in the financial markets
a Further 40 minutes for the exchange over the question of how the German-Chinese cooperation in the financial markets could look like, and how the cooperation in banking regulation. The tips of the Supervisory authorities of both countries. on Friday, some of the agreements and declarations of intent to sign, in order to facilitate the Marktzug of financial institutions in each other’s country
This item touches upon a sensitive area of the Chinese economy. So vigorous present, China’s industry, the fragility of the financial sector. The high growth rates of recent years have been largely financed on credit. With huge government investment projects, the Chinese leadership, to drive their economy. This is not for free. The debt ratio of the state has doubled since 2008 and now stands at more than 50 percent of the economic output.
High debt is a risk for the world economy
But the company, many of them state-owned, have financed their Expansion in the past few years especially with credit. The debt of the company has now reached double the gross domestic product.
Some expert in this degree of debt now a threat to the world economy. If the Chinese can’t make it, their growth rates, you will get difficulties to service their liabilities.
the sheer size of the problem, only an adjustment to the recession, but a non-threatening made financial crisis, which is likely to shake the entire global economy. It is questionable whether the Chinese are willing, warnings, and exhortations from Berlin to listen to.