German industry has big problems
2022.11.21 13:55
German industry has big problems
Budrigannews.com – As the government prepares new policies aimed at reducing the German economy’s dependence on Beijing, one of Germany’s main industry lobby groups called on the government on Monday for more support for industry to diversify trade outside of China.
The Association of German Chambers of Industry and Commerce (DIHK) stated that planned measures such as stress tests and increased scrutiny of investments in China would be an administrative burden for businesses.
Volker Treier, DIHK’s head of foreign trade, stated, “Everything we have heard so far about the German government’s China strategy is extremely defensive.”
“In order to avoid one-sided dependencies, there is a lack of an encouragement strategy for building out sustainable economic relations, particularly in the larger Asia-Pacific realm.”
German officials say Russia’s war in Ukraine showed the economy was too dependent on Russian energy. This has prompted a reexamination of German business relationships with Beijing, especially in manufacturing.
Volkswagen, Mercedes-Benz, and BMW are the only four German companies (ETR:)A research company called Rhodium Group found that the chemicals giant BASF was responsible for a third of all European investments in China from 2018 to 2021.
The document from the foreign ministry, which still needs to be approved by other ministries, said that important industries like autos and chemicals must avoid the risk of overinvesting in China for companies and the country.
Mercedes-Benz’s spokesperson declined to discuss the document’s specific policies but stated that the company considers it “our task to work on greater diversification of our supply chains.”
“With regard to raw materials, batteries, or semiconductors, we need an industrial policy and strategy in Europe that is both active and resilient.”
A spokesperson for BMW also declined to comment on the specifics of the document, but stated that the company would “continue to pursue the goal of opening up new sales markets in the future” and was equally invested in Europe and the Americas as it was in China.
BASF and Volkswagen declined to comment.
Diversified company Merck KGaA said that facilities in China would primarily serve Chinese customers. Among its ongoing investments in the region is a production site for lab equipment in Wuxi, which is close to Shanghai.
When asked to comment on the plans of the German government, the company responded, “We need constructive dialogue with the goal to enhance multinationalism in the face of international bloc building.”
