Europeans should not be followers and adapt to the American rhythm and a Chinese overreaction. French President Emmanuel Macron said this during his visit to China. Criticism of these statements came from many sides – including in Germany. Many companies in this country would have to agree with the point of view.
“If we no longer have China, prosperity in Germany will decline,” says Holger Engelmann, for example. The boss of the automotive supplier Webasto knows what he is talking about. The company generates more than a third of its sales in China and produces in eleven factories there.
Mainly import dependency
That there are many such cases is demonstrated by a simple fact: China is Germany’s single most important trading partner in the world. It is true that more German exports have been sent to the USA in recent years. However, trade statistics are made up of exports and imports. And China has been Germany’s most important partner in international trade for several years. In short: There is at least something like an import dependency on China.
“For raw materials and parts for our production, i.e. preliminary products, we are extremely dependent on China,” Carsten Brzeski told DW. He is chief economist at ING Germany. “It’s significantly stronger than America’s dependence on China, for example. And it’s also greater than France’s dependence on China.” In addition, many companies like Webasto also make a large part of their sales in China. In the second half of 2022, for example, the German car companies Volkswagen, Mercedes and BMW sold almost 40 percent of their cars in China.
In any case, it is certain that China is no longer an extended workbench for industrial nations like Germany. With the China 2025 project, the government in Beijing rolled out a plan some time ago to become the world market leader in essential future technologies in the coming years.
No energy transition without China
This is already the case in some areas – for example in the production of batteries for electromobility. The Chinese supplier CATL alone (which is also setting up plants in Hungary and Germany) supplies around a third of all the batteries needed for electric cars worldwide. And around 80 percent of the lithium-ion batteries for electric mobility worldwide come from China. “Without China there would be no electric cars,” says Carsten Brzeski. And further: “Without China there will be no energy transition, without China there will be no solar cells on our roofs.” Therefore, economic relations with China cannot be ended, especially not in the short term.
A direct freight train line connects Chongqing (Southwest China) with Duisburg in Germany
“It’s a difficult situation at the moment, risk minimization is the buzzword,” said the director of the Mercator Institute for China Studies (MERICS) on Deutschlandfunk. “We are in this double game at the moment: on the one hand stability, also business relationships. At the same time, however, there is an attempt to reduce one’s own vulnerabilities.”
One could also say that Germany, with its close trade ties with China, is in a dilemma: on the one hand, having to maintain relations, but on the other hand not being able to do so uncritically. “Of course, since the outbreak of war in Ukraine, the first reflex has been to say: Now we have to focus even more on friendly countries and end or reduce dependence on China. But that’s not possible,” says ING economist Carsten Brzeski.
New caution
Conversely, many Chinese companies and investors are also represented in the German economy – through takeovers of companies or shareholdings. From 2016, the takeover of the world market leader for industrial robots Kuka by the Chinese Midea Group caused a stir. The two largest shareholders of Mercedes-Benz come from China: on the one hand the BAIC Group and on the other hand the investor Li Shufu, both of which hold almost ten percent of Mercedes.
However, the commitment has decreased in recent years for various reasons. The growing geopolitical tensions and the reservations that Chinese interested parties are increasingly encountering also play a role in this, above all, of course, in areas of critical infrastructure. This trend is likely to continue in the future.