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German financial official: We are in the same boat

Peking University, Apr. 12, 2013: Hartmut Koschyk, parliamentary state-secretary at the German Federal Ministry of Finance, gave a speech titled "The Responsibility of China and Germany in International Financial Policy" at Peking University (PKU) on April 7, 2013.


Inspired by his recent visit to Qufu, the birthplace of the Confucian philosophy, Hartmut Koschyk used the Chinese word "Tianxia" to describe the current globalized financial system of interdependency and common responsibility.


State-Secretary Koschyk gives the speech.


Koschyk explained that export-oriented economies, such as Germany, require stable international environment free from global financial crisis. According to him, global financial markets no longer subordinate to the national economies, the stability of which used to rule. He believes that any economic system, especially the financial one, needs an ethical foundation.


During the discussion with the audience, Koschyk further elaborated on the ongoing state-debt crisis in the Euro-Zone. In his view, the current bailout structures, and institutional supervisions by the European Central Bank (ECB), the European Commission, and the International Monetary Fund (IMF), would be proper remedies. On one hand, the EU member countries could be well prepared to start a reform, making their economies more sustainable and competitive; and on the other hand, moral hazard behavior of the national governments might be restrained.


On international relations, Koschyk stressed that China is an important entity in the world. He particularly acknowledged its role in maintaining peace and stability on the Korean peninsula. In his eyes, China's support for sanctions against the DPRK is the "actual responsibility” as a permanent member of the UNSC.


Being asked about the future of international finance, Koschyk expressed his hope for a more internationally-based framework. In such a "tied-up boat", he said, "some countries" (he did not specify) could no longer abuse monetary policy to exploit other's economies for their own. In this context, he also acknowledged the recent increase of the flexibility of RMB to be "a step in the right direction."


Finally, the state-secretary talked about the strong Sino-German ties. He further emphasized the trans-nationalization of relations in academy, education, as well as among small and medium enterprises. In particular, he mentioned several successful cases of individuals, who had utilized the opportunities offered by the commercial cooperation between the two countries.


The lecture was sponsored by the German Konrad Adenauer Foundation, and organized in cooperation with the German Studies Center at PKU


Right afterwards, Koschyk received an interview from PKU News.



The Interview with State-Secretary Koschyk


PKU News: Regarding your comments on the Sino-German relationship, could you please elaborate a little bit more on China's future economic development, and the cooperation between China and Germany?


Koschyk: I believe that China will have an ongoing, dynamic economic development. China has recognized that economic growth at any cost is not sensible, therefore it will shift to a more sustainable development. Following this path, the European Union and Germany want to be China's constructive partners, especially when China deals with its challenges in environmental and social policies. These are two fields very suitable for Sino-European/German cooperation.


PKU News: China, as an agricultural country, has a huge share of farmers among the population. Bavaria, your home state, also has a long farming tradition. How would you describe the current status of farmers in Germany, and their role in German society and economy?


Koschyk: German agriculture has been widely restructured during the last decades. Today, our farmers do not just produce food. They also produce energy, as energy entrepreneurs, for example with bio-gas. In addition, they also take care of the cultivated-landscape, so it keeps being attractive for tourism. In this context, they also provide touristic services by offering "vacation on a traditional farm."


Therefore, the image of German farmers has changed very much during the last thirty, forty years. In general, we have fewer farmers in our population. Also, there are many farmers, employed in other sectors, just taking farming as their additional part-time job, which our German government is supportive of.


PKU News: Before serving at the Ministry of Finance, you worked on the Korean affairs for a long time, and even co-published two books on the issue. In these works, you seemed very optimistic on an "upcoming" Korean re-unification.


In the light of the recent tensions on the Korean peninsula, are you still that optimistic?


Koschyk: Nobody should generally speak against the right of the Korean people to live united in one state one day. But of course, there have to be certain political conditions.


Looking at German history, the re-unification did not happen against the will of our European neighbors and international partners — but with their support. Therefore, the primary aim right now must be to ease the tensions, and create peace on the Korean peninsula. In this regard, I am very thankful that China takes up its important role in the region and acts very responsibly.


But I am not saying this is simply a task of China. It is important as well that South Korea, Japan, Russia, and the US stay calm and work towards a de-escalation, building up a framework in which it is possible to talk about disarmament, rapprochement, and peace in the region. I am optimistic towards the reestablishment of the six-party talks, and I could imagine that this framework could be further developed into a permanent conference of security and cooperation in Northeast Asia.


PKU News: So you are prioritizing stability over reunification?


Koschyk: In the end, the free will of the people on the Korean peninsula would decide on reunification or not, at a time when they all can choose for themselves. But it must not have negative effect on the surrounding neighbors, and must be happening in cooperation with the neighboring states and international partners.


Reported by: Armin Reinartz, Cheng Zui, and Hu Beibei
Photo by: Cheng Zui
Edited by: Zhao Ning and Amrin Reinartz