The trade exchange was developing fast, but FDI, lending and development aid went only one way, from Germany to China. Germany had great hopes regarding China's accession to the World Trade Organization. The economic success of China is so impressive that in the German government decided to stop providing China with development aid in the traditional form. The cooperation is continued in the form of development partnership concentrated on climate, environment, and energy, economic reforms and the legal system. Today, however, it is not the development cooperation that is valued but the Chinese ability to find an independent solution of internal problems and mutually advantageous cooperation.
Despite the intensive development of the bilateral relations, their rationale was long not clear, 95 and only the global financial crisis has changed that. As Hans Kundnani and Jonas Parello-Plesner indicate in their influential paper of May , special relations have emerged between the two countries. Based on the economic symbiosis between China and Germany, a 'special relationship' is now developing. They argue that Germany is still pro-European, but in the German political circles dominates the opinion that Germany can no longer wait for the European institutions that have not developed and practiced a coherent policy towards China.
As a particularly important element of these bilateral relations they indicate the government-to-government consultations between Germany and China, something that is typical for German relations with countries that it deems important, but what is very unusual for China. Initially, it were exports to the European periphery, but then, after the eruption of the global financial crisis and the eurozone crisis, German exporters focused on China as the most attractive market. The two scholars argue that the German foreign policy is increasingly driven by economic interests.
Chinese and German economies complete themselves. China needs German technology and Germany needs China's market. It could be called "change through trade". Close economic ties should allow Germany to influence China. However, the scholars express the worry that the German strategy is risky and, in consequence, Germany could be manipulated by China. On the other hand, China has a very positive perception of Germany.
Germany is seen as a country without a colonial past and a country with a strong industrial basis that can be helpful to the development of the Chinese economy. Also, the model of the German social market economy enjoys interest in China. China promotes the multipolar world order. Europe, which has no security interest in Asia, seems to China a valuable ally in competing against the USA.
As a dominating power in Europe, with strong economic ties with China, Germany may be its key partner. As Hans Kundani noted in his lecture delivered at the Institute of International and European Affairs in March , immediately after the publication of this paper the term "special relations" for describing the German-Chinese relations was refused by German politicians.
But already in August , during Chancellor Merkel's visit in Beijing, the term was adopted to describe the relations between the two countries. The relations between the FRG and India, the second leading "new player", had an entirely different trajectory. The diplomatic relations between the two countries were established already in and in the prime minister of India Jawaharlal Nehru visited the FRG. At that time, the relations were developing very well. With support of the German development aid, the Rourkela steel mill was constructed and the Indian Institute of Technology Madras Chennai was built.
Cultural relations were also developing well. But then, since the mids, the German-Indian relations "were caught in the doldrums of benign neglect". The federal chancellors did not visit India for 19 years. Only in the second half of the s the relations started to be intensified once again.
They allowed intensification of political exchange, strengthening of economic ties and development of a lively cultural and scientific exchange.
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The framework for the current Indo-German relations was established by the "Agenda for German-Indian Partnership in the 21st Century", which was adopted by the foreign ministers of the two countries in May and which focuses on economic, cultural and scientific issues. The Agenda is the basis for further agreements between the two countries. Two of these agreements, adopted in and , are particularly important. An essential element of the agreement was a declaration that the bilateral relations are based on shared values, principles, and visions.
The dynamic growth in India was followed by the development of economic relations with Germany. The two countries cooperate also in security issues. In , the defense ministers signed a defense and security agreement. Germany was a part of the consortium offering the Eurofighter Typhoon, but it lost the contract to the French competitor.
The decision in favor of the French Dassault Rafale is still discussed in India and the European consortium does not give up the contract offering better terms. The economic ties have been strengthening as well. Indo-German trade has developed dynamically and German investments in India have increased.
But in comparison to the German-Chinese trade exchange the numbers are small. There is a strong expectation that in the future Indian companies will invest in Germany as well, trade relations will be better balanced and India will diversify its export basket toward high-tech products. It and biotechnology are two sectors with the best prospects for the future.
A further important element of the Indo-German relations is development aid. Despite dynamic economic growth, India is still one of the poorest countries of the world, with million citizens living on less than 2 USD per day. The German aid focuses on three areas. The first one is the energy sector, especially energy efficiency and renewable energy sources, the second is environment protection, and the third is sustainable development.
In , this aid was worth over 1 billion euro and it was the highest in history. The comparison of the German-Chinese relations and the Indo-German relations shows deep differences. Thanks to China's economic dynamism, the German-Chinese relations are much more intensive and play a more important role for the German diplomacy.
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On the other hand, the Indo-German relations are founded on the foundation of common values. They also have a much lower conflict potential, in economic as well in political terms. The German foreign policy has experienced a strong shift in the last two decades. In the early s the issues connected with the German unification and then European integration constituted a priority for the German foreign policy, but then the interest moved toward Asia and the "new players". The German foreign policy has reacted to global changes and tries to adapt to the new balance of power.
Especially the relations with China play a crucial role. It is an interesting market but at the same time a potential economic and political rival.
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The close relations with the "new players" have not brought about any change in the principles of the German foreign policy. Germany is a status quo power, well integrated in the Atlantic-European community.
The German government has no intention to challenge the current alliances in face of the new powerful competitors. It is interested in strengthening the cooperation within the European Union and the eurozone. Germany is willing to develop relations with the "new players". Economic relations are prioritized. They provide an opportunity to sustain prosperity in Germany. But even today, one of these powers, China, is also an economic competitor. Other "new players" will probably follow in the coming decades.
This development should strengthen the German dedication to deepening the European integration and building a strong, single European voice in the global arena. Revival of the close German-American partnership should be the second aim of the German diplomacy. Megatrend Review, , 6 1 , Sicherheit, Wohlfahrt, Institutionen und Normen. Germany and the United States must remain allies - they are practically family", IP-Journal [online].
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