China And Germany Hold Cooperation Talks
Life goes on: Volkswagen and Anhui executives sign a new joint venture deal to build electric cars in China, under the watchful eyes of Li Keqiang and Chancellor Angela Merkel. Sean Gallup Getty Images

Germany and China Position Themselves as World Climate Leaders

Jun 01, 2017

Germany and China said Thursday they will keep to their commitments to slow or stop climate change regardless of whether or not President Donald Trump pulls the U.S. out of the Paris Accords.

"China will continue to implement promises made in the Paris agreement to move toward the 2030 goal step-by-step steadfastly," the broadcaster Deutsche Welle reported Premier Li Keqiang saying at a press conference in Berlin with Chancellor Angela Merkel. "China is a big country, and China will therefore keep to its international responsibility," he added in an apparent sideswipe at the U.S. President.

Read: President Trump Expected to Pull US from Paris Climate Agreement

For her part, Merkel, who was so dismayed by Trump's attitude at last weekend's G7 summit that she said Europe would "have to take its fate into its own hands", poured praise on China as "an ever more important partner, one who has now become a strategic partner."

While the meeting had been planned for some time, its timing gave the leaders of the world's second and fourth-largest economies the chance to show what a future without U.S. economic leadership may look like. The two leaders put aside a quarrel over new Chinese measures to promote electric vehicles, a key plank of China's commitments under Paris and one that also dovetails with its efforts to curb urban pollution.

Read: President Trump Criticizes Germany in Tweet Amid Tensions with Merkel

Li told a news conference that China had made concessions to German concerns, without giving further detail. Germany has been lobbying hard since China released a draft policy in September to set a target for 8 percent of automakers' sales to be battery electric or plug-in hybrid vehicles by 2018, rising to 10 percent in 2019 and 12 percent in 2020. Reuters reported in March that China could consider pushing back the 8 percent target to 2019 after the automotive industry criticized the scale and pace of the plans.

However, German officials had also voiced concerns that the new rules would force German carmakers to hand over all of their intellectual property to local partners in return for access to the Chinese market, which is by far the world's largest for EVs, even though so-called New Energy Vehicles last year accounted for only 1.8 percent of sales, according to Reuters.

Read: Elon Musk: If President Trump Quits Paris Agreement, I’ll Quit White House Advisory Councils

With the political issues settled, Germany's two largest auto groups were able to ink deals for new joint ventures in China focusing on EVs. Daimler agreed to upgrade the Mercedes-Benz factory in Beijing to make electric cars, while Volkswagen said it will form a new 50-50 joint venture with Anhui Jianghuai Automobile. Daimler also agreed to buy a minority stake in Beijing Electric Vehicle Co., Ltd. (BJEV), a subsidiary of its existing partner Beijing Automotive Group, for an unspecified amount.

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