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The EU’s efforts to defend its steel industry against cheap imports from China are as misguided as China’s continuing overproduction of primary steel. Both sides will have to move away from traditional steel production and into higher value products to stay competitive.

China’s rejection of the South China Sea ruling poses a serious challenge to the rules-based international order. European nations can play an important role in forging a response using a new “G7 plus” Format.

China is a new player in the global knowledge economy dominated by Western countries and Japan, and to some extent by South Korea and Taiwan. Part two of this series assesses China’s potential to become a transformative force in global innovation.

China is a new player in the global knowledge economy dominated by Western countries and Japan, and to some extent by South Korea and Taiwan. Part one of this two-part series examines the foundations of China’s techno-nationalist drive for innovation.

Hamburg is a hub for European trade with China, and many Chinese companies are headquartered in the city. At a time when the German public is concerned about growing competition with China over innovation and technology, European entrepreneurs stressed the need to cooperate at a MERICS China Dispute organised in cooperation with the Hamburg Chamber of Commerce.

The surge of Chinese FDI in Europe poses a novel challenge to investment regimes and competition policy. Policymakers should take concrete steps to deal with China's aggressive outbound industrial and technology policies and to prevent market distortions by state-controlled investors.

Interview with Arthur Kroeber

China will need economic and political reforms to keep up growth, says Arthur Kroeber of Gavecal Dragonomics, an independent research firm in Beijing. In this Podcast he argues that the transition to a new growth model won’t be possible without cutting back state-owned enterprises, restructuring financial markets, and promoting globally competitive innovation. “President Xi seems willing to sacrifice economic vitality to maintain political control.”

China has to introduce regional solidarity if it wants to become a high-income country. Fiscal redistribution could bridge the gap between rich and poor provinces.

In times of slower growth, the Chinese government’s promise to abolish poverty in China by 2020 will be hard to keep. Beijing will have to actively support weak segments of Society.

Ting Guan

China allows local governments a lot of say in implementing environmental policy. This system may lead to uneven outcomes, especially when compared to environmental pioneers like Germany. But in light of vast regional differences, ‘one size fits all environmental policy implementation’ will not work in China. 

Interview with Thomas Eder

Tensions in the South China Sea could further escalate after a ruling by a UN tribunal expected within the next few weeks. China is likely to take provocative action should the court rule in favour of the Philippines, said MERICS fellow Thomas Eder. In our latest Podcast, Eder warns that the EU cannot afford to ignore this challenge in a region that includes important shipping routes for its trade with Asia.

The Chinese bid for a substantial share of robotics maker Kuka is a serious dilemma for Germany. Chinese acquisitions of global leaders in high-end manufacturing risk hollowing out Germany’s Industry 4.0 strategy.

China’s rise as a global player is forcing EU member states to rethink the way they pursue their security interests. The Organization for Security and Cooperation in Europe (OSCE), presently chaired by Germany, could become a valuable tool for engaging China on critical security challenges, particularly in Central Asia.

Investors’ fears over China selling off its foreign currency reserves are short sighted. Rather than signalling an impending crisis, the development shows that China is now investing globally and that the yuan is on track to become an international currency.

From book clubs to real estate and e-commerce – Ekkehard Rathgeber’s career in China mirrors the country’s tumultuous development since 1989. The German entrepreneur spoke about his experiences at the MERICS China Lounge.

The US claims that China’s internet controls may violate the rules of global trade. This line of argument exposes a dilemma for China’s leaders who struggle to uphold an increasingly authoritarian system in an era of deepening international Integration.

As rising tensions in the South China Sea worry policymakers from Washington to Brussels, the US and the EU should seize the opportunity to cooperate with China in another part of the world. China’s growing role in the Mideast and its “One Belt, One Road” initiative could be a starting point for non-traditional maritime security cooperation.

A few years ago, Western countries feared that China’s forays into Africa would cut them off from commodities. In light of current low prices it looks as if China made a mistake when it secured access to resources through risky Investments.

In Part 2 of our series on the 13th five-year plan, Sandra Heep explains why China’s ambitious growth target will exacerbate many of the country’s economic problems. She argues that the looser monetary and fiscal policy necessary to reach this goal will put depreciation pressure on the renminbi, inflate asset prices and increase China’s debt burden.

Accepting its trading partner China as a market economy does not need to be a bad deal for the EU. The costs of Chinese dumping to the European economy are often overestimated. And levelling the playing field may even incentivise Chinese companies to be more transparent in calculating costs and Prices.

The economic and political costs of granting Market Economy Status (MES) to Beijing without extracting concessions in return would be too high. In addition to economic interests, political and strategic considerations should also guide the EU’s decision.

China’s leaders want to establish the yuan as a global asset and transaction currency. But this won’t work as long as exchange rates are driven by conflicting domestic policy targets rather than by global markets.