Germany needs to “diversify” its export destinations, German Minister of Finance Christian Lindner said yesterday, warning that Europe’s top economy is too reliant on trade with China.
“My concern is that ... we have a strong economic inter-connectedness with China,” Lindner said in an interview with Die Zeit weekly.
“We need to diversify international relations, including when it comes to our exports,” he said.
Photo: AFP
Tensions between China and the West are on the rise following Beijing’s refusal to condemn Russia’s invasion of Ukraine, whereas the EU and the US have imposed sweeping sanctions on Moscow.
Germany’s government came to power in December last year vowing “dialogue and toughness” in its dealings with China, with a focus on human rights after the commerce-driven pragmatism of previous administrations.
“Perhaps the time has come when we should preferentially do business with those who are not only trading partners, but also want to be partners in values,” Lindner said.
China was again Germany’s largest trading partner last year, with the countries exchanging goods worth 245 billion euros (US$268 billion).
A survey by the Ifo economic institute published late last month found that 46 percent of German manufacturers source “key inputs” from China.
Of those companies, “almost one in two” plans to reduce the imports, it said.
Even before the Ukraine conflict, the EU’s relations with Beijing had been battered by disagreements, including over China’s trade coercion of Lithuania over Taiwan and treatment of the Uighur minority.
However, experts say that the bloc remains reluctant to go too far in pressuring Beijing at a time when soaring energy prices and inflation are already causing major economic pain.
Separately, European businesses operating in China are struggling to cope with COVID-19 lockdowns that are hurting production and threatening supply chains.
The EU Chamber of Commerce in China at a media event yesterday warned of disrupted output.
Chamber president Joerg Wuttke said that erratic enforcement of China’s “zero COVID-19” rules is making it difficult for firms to adjust operations.
Additional reporting by Bloomberg
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