“We can’t do without China” warning from German business world

While China has been Germany’s largest trading partner for the past 6 years, the German public has been discussing economic dependence on China after Russia’s recent energy dependence resulted in an energy crisis.

As the government in Germany works to economically change the Chinese strategy, the German business world, emphasizing the importance of China to the economy, warns that they cannot do without China.

GOVERNMENT REDUCTION PLAN

According to the news reflected in the German press, the German Ministry of Economy and Climate Protection is working to change the country’s economic strategy in China.

In Germany, the government is working on a new trade policy with China to reduce dependence on China’s raw materials, batteries and semiconductors.

In the 100-page draft report prepared by ministry staff, attention is drawn to the economic dependency in German-Chinese relations, including reducing reliance on China and expanding supply routes.

‘WE MUST NOT TURN 180 DEGREES’

Peter Adrian, president of the Association of German Chambers of Industry and Commerce (DHIK), warned that the change in strategy towards China would have negative consequences for German companies, in statements to the German News Agency (DPA).

Noting that China remains a very important ‘economic area’ for Germany, Adrian said: “We have learned from our experience with Russia that we definitely should not naively run into dependencies. However, based on this awareness, we must not make a 180-degree turn.”

Recalling that most German companies operating in China produce for the local market in China, Adrian said: “This is often ignored in discussions here. Of course, one of the lessons learned from the crises of the past few years is to spread your business risks more evenly. Companies are doing this very strongly right now. But the idea of ​​moving away from China entirely is unrealistic. “We want to see more pragmatism and less ideology from the federal government,” he said.

‘You shouldn’t present yourself as someone who knows everything’

Expressing that he wanted to focus more on not leaving everything to the Chinese when competing in other parts of the world, Adrian said: “We shouldn’t think that everyone should follow our value system. “If you want to do business and make connections somewhere, you shouldn’t present yourself as a know-it-all.”

Siegfried Russwurm, president of the German Industrial Federation (BDI), stated that Germany’s strategy with China must address three dimensions: “China as a partner in solving global challenges, China as a systemic competitor and China, which is and will remain a market for German industry… (what Germany needs) are real alternatives to buying from China, such as raw materials, and the opening of other markets outside of China. “Both are necessary to reduce our dependency,” he said.

‘You will have to cut your ties with some countries’

Dirk Jandura, president of the German Foreign Trade and Wholesale Association (BGA), said that China is a very large market, so there must be a balance in Germany’s strategy in China.

“German companies are already working hard to diversify their supply chain. But this takes time. It is right to critically question Europe’s relationship with China. But I wish the federal government didn’t overreact by throwing the baby out with the bathwater. This would be the worst move for anyone involved. made an assessment of him.

Claiming that they are defenders of human rights, Jandura wanted politicians to trust German companies much more.

Stating that global trade has lifted many people out of poverty around the world, Jandura said: “If you think in black and white, you will have to severely cut ties with some countries, but then our well-being and theirs are at stake. hazard”. at risk. You should approach it in a more pragmatic way without losing sight of the goal.”

GERMANY-CHINA RELATIONS

While Western countries, especially the US, Canada, and Australia, have started to take a tougher stance against China, which is expanding its economy and influence, Germany is seen failing to address this by keeping its trade relations ahead of politics. .

China’s increasing effectiveness in Europe through investments and acquisitions in critical sectors such as infrastructure and technology, including European Union (EU) countries, has long been a topic of public debate.

The fact that the economic relations of Germany, which has the largest economy in Europe, with China play a decisive role in political relations, also provokes criticism on the continent.

Former German Chancellor Angela Merkel visited China 12 times during her 16-year tenure. The government prioritized economic relations over human rights. While Merkel-era Chinese policy was frequently criticized by opponents, it should be noted that Prime Minister Olaf Scholz, with a similar approach to Merkel, continued economic cooperation with China considering trade balances.

GERMAN CARS ARE COMING TO ATTENTION IN CHINA

While the EU sees China as a negotiating partner for the union, as well as an economic and systemic competitor, Germany, which has an export-oriented economy, has been one of the countries that has benefited most from China’s opening to the global economy for years. .

German cars and machines are in great demand in China.

While exports to China supported Germany’s strongest post-World War II economic growth in the past 10 years, China became Germany’s largest trading partner in 2016.
Germany’s dependence on China is striking in foreign trade, supply chains or the large market. Germany appears to have a “heavy import dependency” on China, including for raw materials such as lithium batteries and rare-earth elements, which are increasingly important for electric cars.

COMMERCIAL VOLUME EXCEEDED 245 BILLION EUROS

The Covid-19 lockdown in Shanghai, which has severely disrupted supply chains around the world in recent months, has also revealed just how dependent the German economy is on primary and intermediate products from China.

According to data from the German Chamber of Foreign Trade (AHK), approximately 5,000 German companies operate in China. 1.1 million jobs in Germany depend on trade with China.

The Chinese market is of great importance for German companies, especially German car manufacturers, both in terms of sales and growth. German companies develop and test the latest technologies in China for the global market.

Although China has been Germany’s largest trading partner for the past 6 years, the trade volume between the two countries exceeded 245 billion euros (246 billion dollars) last year. (AA)