German reliance on Chinese imports 'dangerous': German Finance Chief

By Al Mayadeen English
Source: Agencies
10 Feb 2023 19:14

Germany's trade with China has hit a record high for the seventh consecutive year as official data by Destatis, the federal agency, revealed on Thursday that the turnout for 2022 reached 297.9 billion euros ($318.8 billion).

Cars and containers are pictured at the 'duisport logport' logistics center at the river Rhine in Duisburg, Germany, Friday, Oct. 28, 2022 (AP Photo/Michael Sohn)

Germany's Finance Minister Christian Lindner said on Friday that the country's increasing dependence on Chinese imports was a "dangerous development" and that Berlin should re-evaluate its approach to foreign trade.

"A dangerous development: Germany's trade deficit with China more than doubled in 2022. We should learn from the experience with Russia," the minister said on social media, adding that Berlin should "urgently review this and opt for more free trade with partners who share our values."

Germany's trade with China has hit a record high for the seventh consecutive year as official data by Destatis, the federal agency, revealed on Thursday that the turnout for 2022 reached 297.9 billion euros ($318.8 billion).

According to Destatis, China exported €191.1 billion worth of goods to Germany, whereas Germany's trade deficit stood at €84.3 billion.

EU Commission President Ursula von der Leyen said on January 17 at Davos that the EU should de-risk rather than decouple its trade ties with China and that the EU should use its foreign subsidies to do so.

The concept of de-risking involves banks restricting business relationships with clients to avoid, in this case, what it considers an 'unleveled playing field' concerning green subsidies.

The EU President blamed China for enticing European businesses to relocate to China with promises of affordable energy, affordable labor costs, and business-friendly regulations.

While admitting that the EU still relies heavily on China for strategic resources, particularly to highlight the transition toward net zero, Von der Leyen called on de-risking investments with China rather than decoupling, which involves completely cutting economic ties with the Asian country.

Hence, the EU is aware that a decoupling approach would not work, but de-risking would involve a slow and structural process towards ending reliance on Chinese trade, journalist Alan Beattie said in an op-ed for the Financial Times.

On another note, official figures indicated on Wednesday that trade between the US and China has skyrocketed with a total of $690.6 billion in imports and exports in 2022.

US imports from China jumped to $536.8 billion last year since Americans splurged on Chinese goods such as toys and phones, while US exports to China increased to $153.8 billion.

Deborah Elms, the founder of the Asian Trade Centre, relayed to the BBC: "I think it's an important indication of the difficulties of actually decoupling," as she added: "Even if governments, firms and consumers wanted to separate, the economics make it difficult to deliver products in a decoupled world at a price that firms and consumers are willing to pay."