Chinese delegation to meet with Germany's top corporate brass next week

By Christoph Steitz, Andreas Rinke and Sarah Marsh

FRANKFURT/BERLIN (Reuters) -A Chinese delegation led by Premier Li Qiang will meet Germany's top CEOs next week as part of a visit to Europe, hoping to strengthen ties at a time when Berlin is pursuing a strategy to lessen its economic dependence on Beijing.

The meetings highlight the dilemma for German companies, which greatly depend on the Chinese market to sell their goods and procure materials, putting them at odds with the government's goal to diversify away from China.

A meeting between Li and a group of German and Chinese CEOs is scheduled for June 19, according to people familiar with the plans.

Mercedes-Benz, SAP and Siemens Energy all confirmed that their CEOs would meet with the delegation. The CEO of Volkswagen division Audi will also participate, a person familiar with the matter said.

A spokesperson for Mercedes-Benz, which counts China's Beijing Automotive Group Co Ltd and Geely Chairman Li Shufu as its two top shareholders, said topics would include Mercedes' commitment to China and the ongoing opening of the Chinese market following the COVID-19 pandemic.

Siemens CEO Roland Busch, who also chairs the Asia-Pacific Committee of German business (APA), will also be present at an event with Li, German Chancellor Olaf Scholz and Economy Minister Robert Habeck scheduled for June 20, the people said.

Andrew Small, a senior fellow at the German Marshall Fund's Asia program, said the question was whether Germany was using de-risking as a cover of essentially maintaining close business ties with China, except for a few areas such as raw materials.

BASF, Bayer, Infineon, Volkswagen and BMW, all companies with major business ties to China, declined to comment.

Siemens confirmed that its CEO would be present at the event on Tuesday in his capacity as APA chairman.

While German CEOs have repeatedly warned of cutting or reducing economic ties with China, given its significance, industry has realised that dependency on China regarding critical raw materials needs to be addressed.

"The motto has to be: overcome one-sided dependencies, but not by doing less business with China, but rather more business with other countries," Siegfried Russwurm, head of German industry association BDI, said in May.

Analysts and economists, however, have cast doubt on Germany's ability to do that fast enough to reduce the economic leverage China could have over Berlin in the event of a geopolitical crisis such as one possibly involving Taiwan.

Geopolitical tensions were also causing uncertainty for Chinese companies in Germany, said Wei Duan, head of the Chinese chamber for commerce in Germany.

"Until now they invested in Germany although it was expensive and took longer due to bureaucracy. But they saw Germany as a reliable country," he said. "Now they are asking if the welcome culture will stay intact."

(Reporting by Ilona Wissenbach, Hakan Ersen, Christoph Steitz, Ludwig Burger and Patricia Weiss in Frankfurt; Christina Amann, Andreas Rinke, Rene Wagner and Sarah Marsh in Berlin; Jan Schwartz in Hamburg and Alexander Huebner in MunichEditing by Louise Heavens and Matthew Lewis)