- Study: hardly any German dependencies on China
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EU Energy Commissioner Kadri Simson is promoting a new European electricity market design and long-term Power Purchase Agreements (PPAs) with the promise of “stable and affordable prices”. Now, she says, the focus is on getting these PPAs to companies. Manuel Berkel analyzes how the breakthrough of PPAs can be achieved and how medium-sized companies can benefit from them.
In Germany, politics and business are intensively discussing how to reduce dependence on China. However, the situation is apparently not as dramatic as previously thought, according to a study that examined the profit situation of German companies in the People’s Republic. There is no critical economic dependence of the Federal Republic of Germany on China, the study says. Nevertheless, the authors provide some recommendations, as Christiane Kühl reports. Among other things, they urge EU member states to act in unison on the China issue.
However, there was no talk of European unity after the controversial statements by French President Emmanuel Macron about China and Taiwan. On the US side, there also seems to be a need for discussion: In a phone call with Macron, US President Joe Biden reaffirmed his stance that peace and stability must be maintained in the Taiwan Strait, according to a statement from the White House.
In France, people are now using pots and pans and other utensils to make noise in their protests against Macron and his policies. The phenomenon of “Casserolade” is currently being discussed in a rather lighthearted manner in France. However, the tense atmosphere in the country and Macron’s damaged image are cause for concern, writes Claire Stam in her Column.
Sarah Schaefer
Feature
Study sees hardly any German dependencies on China
According to a new study, Germany’s economy is far less dependent on China in most sectors than is generally assumed. This is the conclusion of a study published on Thursday by the Bertelsmann Foundation, the German Economic Institute (IW), the China Institute Merics and the Federation of German Industries. The study systematically analyzed the profit situation of German companies in China – according to its own information for the first time ever – including special analyses of Bundesbank data.
Between 2017 and 2021, profits amounting to seven to eleven billion euros flowed back to Germany each year from the direct investments of German companies in China. This puts China’s significance at about the same level as the USA, with a share of 12 to 16 percent of companies’ foreign profit returns. The EU’s share, however, was significantly higher at an average of 56 percent. The overall economic significance of the profits generated by German companies in China is relevant, but limited.
Despite its growing importance, the People’s Republic continues to play a relatively minor role as a destination for foreign direct investment compared to the EU, the authors write. They argue that Germany’s economic dependence on China is not critical. This is a rather surprising conclusion given the heated debate about excessive dependence on China.
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