Xi rebuffs Scholz pressure to rein in Chinese manufacturing

Olaf Scholz with Xi Jinping in Beijing on April 16.
Photo: Getty Images

Chinese leader Xi Jinping told the German chancellor that a surge in clean-technology exports from the Asian nation has helped the world tackle inflation, pushing back against European and US pressure to rein in the country’s powerhouse industries.

Xi’s comments to Olaf Scholz during talks in Beijing suggest China may not be swayed in any meaningful way by the German leader’s push for a reduction in what Western officials see as excess manufacturing capacity.

Tensions between China and the European Union and US are mounting over trade, leading to threats of new barriers to hundreds of billions of dollars in commerce. The EU has launched probes into Chinese subsidies for electric vehicles and support for windparks, and is poised to begin an inquiry into the procurement of medical devices.

“China’s export of electric vehicles, lithium batteries and solar products have enriched supplies to the global market and eased inflationary pressure, as well as made a great contribution for global efforts to tackle climate change and green transition,” Xi told Scholz, according to Chinese state television.

He said China and Germany should look at the question “objectively” and address it from a market perspective. He also warned against protectionism.

Scholz told an audience of university students in Shanghai that “competition must be fair.” He added that he would like to see “no dumping” and “no overproduction,” and that copyrights should be respected.

China reported data on Tuesday that showed economic growth beat expectations in the first quarter as the industrial sector powered forward, although a tail-off in March activity signaled more support may be needed to sustain that momentum.

During a discussion about Russia’s war on Ukraine, Xi reiterated China’s established position to Scholz.

According to a report by state news agency Xinhua, he emphasized that “in order to prevent the conflict from spiraling out of control, all parties should work together to restore peace as soon as possible.”

Xi also told Scholz that all nations should sit at the negotiating table and no country should be “on the menu” of any other, according to a person familiar with the discussion.

The German delegation viewed this as a sign that China is taking Europe’s concerns over Russia’s war against Ukraine seriously, said the person, who asked not to be identified discussing confidential talks.

Xi earlier touted the importance of China-Germany ties as the world faces “increasingly more challenges and risks.” He said the two nations should “join hands to inject more certainties” internationally.

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