Breakthrough in EU, China Investment Talks ‘More Urgent Than Ever’

Germany’s ambassador to China called for a “breakthrough” this year in bilateral investment treaty talks between the European Union and China to stimulate recovery from the worldwide shutdowns amid the Covid-19 pandemic.

Clemens von Goetze, the top German envoy in China, told Caixin in a written interview that “China, the EU and Germany have a strong common interest to pursue the ambitious agenda we have set ourselves for this year, in particular the EU-China Comprehensive Agreement on Investment.”

“Against the backdrop of the economic impact of Covid-19, a breakthrough is more urgent than ever,” Goetze said, without elaborating.

Despite difficulties in scheduling face-to-face negotiations in the EU-China Bilateral Investment Treaty (BIT) talks, Goetze said, “with a strong political will we can move forward.”

The parties concluded a 28th round of talks April 20 -24. China’s Commerce Ministry said in a statement Friday that the talks have made “positive progress.” Beijing and Brussels agreed to initiate the BIT talks in 2012 and held the first round of negotiations in early 2014.

The BIT negotiation remains at the top of the agenda of an annual bilateral summit between Beijing and Brussels, which was previously scheduled to take place at the end of March in Leipzig, Germany, but was postponed because of the Covid-19 pandemic.

“From our side, we will do everything we can to make the Leipzig summit take place as foreseen, because it will provide a unique opportunity to drive our relations forward,” Goetz said. “China should proceed with its reforms and provide the level playing field we have been asking for many years. It will be a most important signal at a time when we face a global recession.”

In the written interview, Goetze urged global “cooperation and solidarity” in battling the “common challenge” of the new coronavirus, called for “transparency, accuracy and reliability” of information sharing, and emphasized that “xenophobia and discrimination must be stopped decisively whenever and wherever it occurs.”

Here is the written interview:

Compared with other European countries, the quantity of hospital beds per 1,000 people and equipment for intensive care units within Germany is much higher than its neighbors. The speed and scope of carrying out novel coronavirus tests in Germany were also much more efficient. Why is Germany better prepared in this regard, and how does the mechanism of preparedness of medical resources work in Germany?

The Covid-19 pandemic is a global health crisis of unseen dimensions. The loss of lives and the personal hardships are very saddening, and I would like to offer my deep sympathy to all those affected in China and across the globe. The medical personnel fighting the virus at the front line deserve our utmost admiration and respect. The human dimension must always be kept in mind when looking at numbers and statistics.

The pandemic puts a heavy burden on every public health system across the globe. The challenges range from developing appropriate preventive measures, testing and contact tracing, hospital treatment up to research and development of therapies and potential vaccines.

Germany traditionally has a strong and well-funded public health infrastructure including a highly qualified medical workforce, which is helping our response. With regard to treatment, the Intensive Care Unit (ICU) capacity you mention is critical. According to a recent OECD study, Germany is well equipped with ICU beds per capita. As not all regions are affected to the same degree, hospitals and other medical practitioners are exchanging load data through joint platforms to allow for regional transfer of patients where needed.

Testing is another decisive factor. German scientists have played a key role in developing a SARS-CoV-2 test in the early days of the pandemic. According to the Robert Koch Institute, the federal government agency responsible for disease prevention and control, the current daily testing capacity of private and public laboratories in Germany amounts to around 100,000.

Thus, testing and treatment, which are covered by the universal health insurance system, is available and affordable to every affected citizen.

Raising awareness for the need of social distancing measures among the public is of course another important element of medical preparedness. The German federal government and the governments of the regions have undertaken repeated efforts to convince citizens that restrictions are in their best interest, proportionate and effective. Current surveys indicate that public support in Germany for these measures is strong.

The fatality rate of coronavirus in Germany is still far lower than the global average. How does the German government evaluate the current phenomenon? Will Germany continue to expand its acceptance of patients from other countries? How would you evaluate Germany’s role in Europe in this battle against Covid-19?

Fatality rates across regions and over time vary for a number of reasons such as demographics and medical history of infected patients. The number of conducted tests is of course another important factor. The current level of fatality rates in Germany is not a reason for us to be overconfident, but rather to put to good use available treatment capacity.

German hospitals have so far admitted more than 200 patients in critical condition from Italy, France and the Netherlands ― partially through airlifts organized by the German Air Force. Germany is also providing critical equipment such as respirators to severely affected countries.

European solidarity during these difficult times is of the essence. Germany will continue to be guided by this spirit. To give you an example from our diplomatic service: The German Foreign Office has brought back hundreds of thousands of travelers from all over the world in an unprecedented repatriation effort. And we have reserved a substantial number of seats for stranded citizens from other EU countries on these repatriation flights.

Our Minister of Foreign Affairs, Heiko Maas, has only recently announced that our Presidency of the European Council in the second half of 2020 will be dedicated predominantly to formulating and implementing a joint European response to Covid-19 and its aftermath.

When was the German Embassy in Beijing first notified by the Chinese authorities about the pneumonia outbreak in Wuhan? What information was shared then? Was this exchange of information conducted regularly? What information relating to Covid-19 has further been requested by the German authorities? Since Germany started to see an accelerating increase of coronavirus cases, what kind of cooperation has China offered to Germany?

We were alerted by the public statements of the responsible authorities in Beijing, Hubei and Wuhan. After Wuhan and later other areas of Hubei were placed on lockdown, the embassy focused on providing consular support to German nationals and their families in the region. For many of them, we organized repatriation flights. There were of course a number of administrative questions to be coordinated with the Chinese authorities. We received strong support in particular from the Foreign Ministry and the Hubei foreign affairs office.

When the magnitude of the outbreak became evident, we started efforts to provide Wuhan and Hubei with equipment needed to fight the epidemic. Germany donated about 20 tons of medical equipment to hospitals in Wuhan. Now the table has turned, and the German government and German companies are buying medical supplies in China to fight Covid-19 in Germany. We are also very thankful for donations that have come from China, which underline the importance of mutual solidarity during this global pandemic.

For these and other shipments to arrive on time, it is crucial to ensure that supply chains, notably international air cargo, between China and Europe continue to operate smoothly even in times of far-reaching travel restrictions and quarantine measures. We appreciate the readiness of Chinese authorities, in particular the Ministry of Commerce, but also many others, to support our efforts.

How has the German Embassy, under your leadership, successfully persuaded the Chinese side to take the principle of allowing those German family members with Chinese nationality to be evacuated together from Wuhan? How long and through which level of the diplomatic channel did it take the embassy to achieve this goal?

As a general rule, we offer consular support not only to German nationals but also to members of their core family. We appreciate that the Chinese authorities at the national and provincial level accepted this approach.

Chancellor Merkel has said she hopes to cooperate with China in scientific research and cooperation in the fields of vaccines and drug development to set an example of unity and fight against the epidemic. Has there been any development of this cooperation that you could tell us about? For the middle or longer term, would the German government consider enhancing its engagement with key public health surveillance institutions of China, i.e. Chinese CDC and others? Are there some designs and principles in the German epidemic monitoring system worthy of Chinese’ reference and emulation?

The Covid-19 pandemic is already affecting multilateral and bilateral cooperation on global health challenges in various ways. The guiding question will be how to better organize early warning and reporting, containment and mitigation, therapy and vaccine development across borders.

International cooperation on vaccine development will be critical. To this end, Chancellor Merkel in January, prior to the outbreak of Covid-19 in Germany, for example pledged an additional 600 million euros to the global vaccination alliance “Gavi.” In more general terms, it is essential to promote open exchange between scientific communities and R&D labs of companies.

It has also become clear that use of digital technologies can help to significantly improve transparency and containment of diseases. Such technologies, however, must be used responsibly and fully respect our citizens’ rights, especially the right to privacy. I am convinced: This is possible.

Would the outbreak hurt relations between China and Europe? If there will be some inevitable China-blaming narratives arising ultimately, how will German political figures choose to deal with that? Would you think the sentiment of distrust toward China can also find its place inside the coalition government in Berlin?

The outbreak is global, and it is a common challenge for all of us. Hence, our response should be cooperation and solidarity. The pandemic requires an all-out effort through shared information and analysis that helps us understand the nature of the pandemic and find the right answers to overcome it. Transparency, accuracy and reliability of information are of utmost importance in this regard. For example, the reporting of many journalists has helped understand the extent of the tragedy that was unfolding in Wuhan and Hubei. An open and transparent exchange will contribute to finding a viable way out of the current global crisis.

This year was designated as an important landmark for Sino-EU relations, but worldwide major events have been postponed. Should we anticipate similar measures for the Leipzig summit and so on? Will the BIT negotiation and signing also be postponed due to the pandemic?

Certainly everybody’s priority right now is to overcome the current crisis. At the same time, China, the EU and Germany have a strong common interest to pursue the ambitious agenda we have set ourselves for this year, in particular the EU-China Comprehensive Agreement on Investment. Against the backdrop of the economic impact of Covid-19, a breakthrough is more urgent than ever. It is true that the pandemic at this stage has an effect on the schedule of face-to-face negotiations. But with a strong political will we can move forward. China should proceed with its reforms and provide the level playing field we have been asking for many years. It will be a most important signal at a time when we face a global recession.

From our side, we will do everything we can to make the Leipzig summit take place as foreseen because it will provide a unique opportunity to drive our relations forward.

How would the German government evaluate the performance and effectiveness of the EU in this pandemic? Will the EU’s relatively delayed response and the lack of coordination efforts with members’ governments undermine the EU’s political credibility? What will be the German government's thinking of an overhaul plan leading to the enhancement of the EU’s public health risk management? Would Germany support the idea of authorizing the EU with broader power in the handling of a cross-border public health crisis or vice versa?

The initial emergency measures were mainly taken by the competent authorities at the national or regional level. We then quickly moved our focus to European coordination, in which EU member states and institutions have been helping each other. It was also a joint EU effort that delivered 56 tons of medical equipment to China in February.

While infection and disease protection is predominantly regulated by national law, cooperation among EU member states and the EU institutions has been very close. Just to give you one practical example: The European Commission plays a key role in organizing and coordinating the EU-wide procurement and production of personal protective equipment. Given the different development of the pandemic across Europe, it is clear that countries and regions will continue to adjust their measures according to the concrete situation on the ground. But in Europe we are well aware of the need for coordination and willing to strengthen it further.

The German government has issued an unprecedented package of 750 billion euros to weather the economic storm of the pandemic. How does the German government evaluate the impact brought by the pandemic to the German economy and the whole European market? Would Germany tend to agree with more flexible fiscal regulations toward all EU members this year, as some countries have argued? Among all contingency measures relating to the economy, fiscal measures, labor, and industrial supports, what is deemed as the most urgent goal?

The severe global health crisis we are facing has brought about an unforeseen global economic downtrend. It has therefore been essential to quickly agree on measures to mitigate the economic impact both at the national and at the European level.

The measures at the national level are unprecedented in volume and directed to both the individual citizen and companies across the board. The German parliament, the Bundestag, in late March passed an additional budget of 156 billion euros, almost half the amount of the original federal annual budget. To minimize unemployment, the government has quickly expanded the so-called “Kurzarbeit” (short-time work scheme), where the government steps in to pay part of the salary if employees cannot be employed full-time anymore. Self-employed and small companies are entitled to support payments of up to 15,000 euros. To further ensure liquidity, companies may revert to publicly funded credit lines and tax deferrals.

At the EU level, member states have recently envisaged an additional support package of 500 billion euros. The European Stability Mechanism will be further developed in the form of faster and more targeted budget assistance to member states. In addition, liquidity for small and medium-sized enterprises will be ensured via a pan-European guarantee fund. The European Commission’s SURE program will provide EU member states with financial support for short-time work measures.

In the medium and long run, what kind of political impact could you envision after the Covid-19 outbreak in Europe? Will there be a new wave of radical right-wing, xenophobia sentiments coming up? What are the German government’s current measures to counter social prejudices?

From my observation, mutual solidarity and support of necessary restrictive measures among EU citizens is strong. The key task will be to mitigate the economic and social consequences and find ways to support those that have suffered most.

With regard to xenophobia and discrimination, let me emphasize very clearly that any attempt to use this pandemic to stir racial discrimination or prejudice will not be tolerated in Germany ― neither by the German public nor the German government. Political leaders and representatives of our society have publicly condemned incidents when they have occurred in the past, and they stand ready to do so time and again.

Xenophobia and discrimination must be stopped decisively whenever and wherever it occurs. My hope is therefore that such efforts will be made continuously and explicitly across the world to avoid any sort of prejudice and discrimination. Also for the foreigners in China, many of whom consider China their home and have great affection for the country and the Chinese people, public support is vital. When, for example, news came up of re-imported cases from abroad, it was important to state that most of these were returning Chinese nationals in order to avoid misconceptions of foreigners´ behavior.

Contact reporter Lu Zhenhua (zhenhualu@caixin.com) and editor Bob Simison (bobsimison@caixin.com)