Germany

Germany is China's largest trading partner in Europe. However, the German-Chinese relationship suffers from various conflicts. The Table.Briefings editorial team has all the latest news. What is the relationship between Germany and China like? Germany and China have officially maintained diplomatic relations since 1972. In 2020, China was Germany's largest trading partner for the fifth year in a row. The trade volume between the two nations amounted to a total of EUR 212.1 billion. Germany had more imports (EUR 116.3 billion) than exports (EUR 95.9 billion). Germany plays a key role for China when it comes to cooperation with Europe, and high-level dialogues are regularly held between Germany and China to negotiate investments, cultural and scientific cooperation, trade relations and environmental programs. Nevertheless, there are some points of contention in the German-Chinese relationship. First and foremost, the human rights situation in China and concerns about not being an equal partner. The tenor is that Germany must strive for a reciprocal relationship, as China would otherwise benefit disproportionately from this partnership. What does Germany get from China? Germany mainly purchases data processing equipment, electrical and optical products such as computers or consumer electronics and batteries from China. From a German perspective, electric motors and household appliances also play an important role in the import business. In the other direction, Germany primarily exports machinery, automotive parts, electrical engineering and chemicals; if services are excluded and only trade in goods is considered, China is the European Union's largest trading partner. In 2020, the EU imported goods worth EUR 383.5 billion from China and exported goods worth EUR 202.5 billion to the People's Republic in the same period. Including services, however, the USA is still the most important trading partner. Why is China an important trading partner? China is not only an important trading partner for Germany because of its abundant exports and imports. Germany hopes to solve problems that German companies have in China through close cooperation. In particular, market access, the need to transfer technology and various market and investment barriers reduce the competitive opportunities of German companies and are to be reduced in the long term. the EU-China Investment Agreement (CAI) is intended to help with this. It was concluded between the European Union and the People's Republic. The background to this is the unequal distribution of rights and obligations in the trade relationship. The agreement is intended to strengthen reciprocity. While Chinese companies benefit from the open market in Europe, European companies are still subject to massive restrictions in China. The steadily increasing volume of trade and the EU-China investment agreement should help to change this situation. How big is China compared to Germany? With 1.4 billion inhabitants, China is the most populous country in the world and has the second largest gross domestic product (GDP) in the world after the USA. Germany follows in fourth place. Germany's GDP is around a quarter of China's. Measured in terms of GDP per capita adjusted for purchasing power, the picture is different. At USD 16,709 per capita per year, China is only in 80th place, putting it below the global average of USD 17,673. Germany ranks 17th with USD 56,226 per capita per year, and with an area of 9.6 million square kilometers, China is about the size of the whole of Europe, or 27 times the size of Germany. On average, 136 people live per square kilometer in the People's Republic, compared to around 230 in Germany, although the regional differences in China are significantly greater than in Germany. Why does Germany trade with China? Germany also trades and negotiates with China in order to positively influence the development of the human rights situation in China. The Federal Foreign Office emphasizes that it is an important interest that minority issues in China are resolved peacefully. China must also increase the openness of its markets and develop constitutional structures and social systems, and it is precisely because the framework conditions are so difficult that relations between Germany and China are currently more intensive than ever before, report the economic departments of the embassies and consulates general. However, the central prerequisite for this bilateral cooperation is not the observance of human rights, but the opening of the Chinese market and the end of discrimination against foreign companies, emphasizes the Federal Ministry for Economic Affairs and Energy. Differences between Germany and China While economic relations between Germany and China are becoming increasingly profitable for both sides, political rifts are becoming ever more apparent. The persecution of Uyghur minorities in Xinjiang and their forced labor, including for German car manufacturers, the suppression of the democracy movement in Hong Kong and the threatening military gestures towards Taiwan are unacceptable to the German government. The "second law to increase the security of information technology systems" was then the subject of an open dispute. This requirement raises the hurdle for participation in the expansion of the 5G network in Germany to such an extent that Huawei's market access is made much more difficult. An approach that companies are otherwise used to from China. Rivalry between Germany and China The economic rivalry and political differences of opinion are now so great that the EU Commission itself surprisingly undiplomatically described China as a "systemic rival" in March 2019. In March 2021, the EU even imposed sanctions on China. In the hope that the situation of the Uyghurs would improve, Germany and China are now only pulling in the same direction politically, at least on the surface, when it comes to climate and environmental protection. The People's Republic wants to be CO₂-neutral by 2060. Federal Environment Minister Svenja Schulze and her counterpart Huang Runqui have signed an agreement to this effect. It remains to be seen whether the agreement really has any value in view of the expansion of coal in Germany and China. Germany and the new Silk Road Germany is also not as committed to China's new Silk Road as the Chinese government would like it to be. The aim of the so-called Belt and Road Initiative (BRI) is to improve the land and sea routes between Europe and the Asian region. One of the land routes is to lead to Germany via Kazakhstan, Russia, Ukraine/Belarus, Poland and Slovakia. Almost 150 countries are now part of the New Silk Road and have concluded Memorandums of Understanding (MoU) with China – declarations of intent for cooperation. 18 out of 27 countries in Europe have one, Germany does not. Many experts criticize the New Silk Road and see it as an instrument used by China to make poorer countries politically compliant. Financing the major infrastructure measures would make smaller countries dependent. The People's Republic would be able to put pressure on these countries and secure raw materials for itself. Environmental or social standards would only play a subordinate role in the infrastructure measures of the Belt and Road Initiative. News on German-Chinese relations The extensive economic cooperation on the one hand and the incompatible political systems on the other make German-Chinese relations extremely complicated. The aggressive foreign policy of the People's Republic also complicates diplomatic relations. The Table.Media editorial team provides all the latest news on developments in the Sino-German relationship.