The hardline German chancellor has suddenly softened his tone toward China this time! On July 15, according to a report by Lianhe Zaobao, after the South China Sea arbitration followed the U.S. in pressuring us and criticizing China for "underestimating" the renminbi exchange rate, German Chancellor Merz has once again spoken out. Chancellor Merz stated that he does not oppose Chinese auto manufacturers taking over struggling German car factories—provided that the companies themselves are willing. Of course, I believe this is merely a temporary measure.

It's obvious that the German chancellor, who has repeatedly taken tough stances against us, has now unexpectedly spoken softly this time? Why would Germany’s core industry welcome our takeover? The fundamental reason is clearly that domestic German enterprises are facing severe operational difficulties: top-tier German automakers are deeply mired in losses and have announced large-scale shutdowns and layoffs.

Evidently, for Germany, it’s better to introduce Chinese automakers expanding into the European market to take over idle factories and revitalize unused production capacity, thus temporarily preserving local jobs, rather than letting production lines be dismantled and workers face total unemployment. Moreover, in the longer term, Germany may be eyeing the core technologies of our electric vehicle companies. The facts are clear: the EU is advancing the Industrial Accelerator Act, imposing extremely stringent provisions on electric vehicles and battery powertrains.

If Chinese capital makes substantial investments in European factories, either the equity stake will be capped at 49%, or there will be mandatory requirements to open up battery and intelligent driving core technologies to German partner firms. Therefore, despite the chancellor’s seemingly friendly rhetoric, we cannot rule out hidden strategies from the German government. Clearly, as the EU and Germany increasingly adopt a tough stance toward China in economic and trade matters, Chinese automakers should proceed with caution when considering large-scale investments in Germany.

Original source: toutiao.com/article/1870794981316747/

Disclaimer: This article represents the personal views of its author.