Scholz's trip to China: economic dependence in danger

Scholz's trip to China: economic dependence in danger

Chancellor Scholz's trip to China represents a complex mission: While the EU wants to defend itself against Chinese export gluts, the German economy remains heavily dependent on China. A recently published study by the employer-related Institute of the German Economy (IW) shows that the German economy's dependence on China continues and has even increased in some areas. Despite calls to reduce import dependency, according to Jürgen Matthes from the IW, there is no evidence of a broad defusing of dependencies.

The study points out that it is difficult to find alternative suppliers for required products in industries such as chemicals and electronics. China also offers many raw materials at such a low price that raw material deposits in other regions are necessarily unused. Because of these challenges, researchers suggest establishing a government task force that would confidentially coordinate with highly dependent companies to reduce dependencies.

While Germany is trying to emancipate itself from China, China itself is struggling with economic problems. The country is flooding global markets with cheap goods to boost its flagging growth through increased exports. This flood of exports also affects sectors such as German industry, which operates in similar areas. China is planning long-term strategic steps to increase competitiveness by focusing on qualitative growth in key sectors.

The USA and the EU have already reacted with punitive tariffs and import restrictions on Chinese products. Germany, with its strong dependence on China, would suffer more than other countries from such measures. Chancellor Scholz has made it clear that fair competition without dumping and overproduction is essential. Despite the current economic turmoil in China, the country's charm offensive remains in place to emphasize good relations with Germany and secure access to technology and capital.