Germany Trade Agreement With China

In the debate on supply chains, it has often been argued early on that the call for the relocation of production amounts to protectionism and anti-globalization. However, at the beginning of April this year, the first critical reflection on the current form of globalization appeared in the German media, a sign that the economic interdependence between China and Germany must be seen in a broader context for the future. However, before discussing these new perspectives, it is first necessary to analyze the question of the current narratives of dependence on China. Germany`s trade volume with China surpassed that with the United States for the first time in 2016. When Trump imposed tariffs on Germany in early 2017, German public opinion rejoiced that China had replaced the United States. The importance of trade with China is presented as Germany`s unilateral dependence on China, which is not commensurate with the complexity of bilateral trade relations. The most widely used example of this addiction is that Volkswagen sells four million cars a year in China. However, as the capital is now highly globalized, the question arises as to whether these transnational companies can still be considered “national champions”. Instead of fearing or blaming China, Germany needs critical self-reflection on environmental and other standards in the supply chain, investment in national education, and the search for a European answer to the Chinese question.

Despite these challenges, Germany`s deep diplomatic and economic relations with China have put it in a strong position to lead the EU`s role in China-EU-US development. Triangle. Merkel said the deals with China were of “new quality” and that China was a developing country, but also a “really tough and very ambitious competitor” for Germany. He continued to measure the United States. for the “demonization” of China and said he hoped China and Europe would find a compromise on an investment deal they have been negotiating for several years, which would ease restrictions on European companies in China. Merkel said she hoped a Sino-EU summit on July 16-17 would bring progress on investment protection and added: “I also hope that Germany and China can help ensure that the world does not sink into a spiral of trade conflicts.” For the current debate, it would be useful to study interdependence with new data. In addition, the Covid 19 crisis shows that import dependencies can be dangerous if work-sharing schemes lead supply chains to focus on individual countries and even individual suppliers. Overall, however, the structure of product groups in bilateral trade has not changed significantly. According to the Bertelsmann Foundation study, since the late 1990s, capital goods accounted for between 35 and 40 percent of German exports to China. In 2019, the machinery and plant industry accounted for 37.7% of total exports. Li stressed the need to fight protectionism and said China needs a stable and peaceful framework for it to evolve, and this is only possible with free trade: “We are against unilateralism – we are for free trade.” Nearly a year later, when Germany passed the 1st Merkel said she feared Hong Kong`s autonomy would be “eroded” and that Berlin would raise issues such as human rights with China during her six-month term. .

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