Although this trend has not yet been confirmed, its symbolism is strong. China lost the title of Germany’s main trading partner. According to statistics from the Federal Statistical Office (Destatis) released on Friday, May 17, the Asian giant will be the US’s largest player in the first quarter of 2024, as well as in the third and fourth quarters of 2023. I was left behind. The hierarchy comes at a time of heightened economic and geopolitical tensions between Washington and Beijing. For Germany, this is a turning point. China has continuously been a major trading partner since 2015.
This trend is largely due to the economic situation in recent months. Germany is in a recession, and imports are lower than in previous years. Demand in China also shrank due to the real estate crisis. In the first quarter, trade with China reached 60 billion euros, while trade with the United States, which is experiencing sustained growth, reached 63.2 billion euros.
Some experts believe this impact could continue into the future. Germany’s trade agency, the German Trade and Investment Agency, said in a January study that the People’s Republic will permanently lose its status as Germany’s main trading partner as a result of China’s real estate crisis and rising geopolitical risks with the United States. We estimated that it was possible.
Diversification of suppliers
This trend also reveals a permanent transformation in Germany’s production structure. Large companies, especially the automotive industry, are increasingly avoiding exports and producing locally in order to serve the market with the help of local partners. Midsize companies are also trying to diversify their suppliers and customers outside of China to protect themselves from risks.
However, many experts have warned of the impact a trade war with China could have on the German economy in the event of retaliatory measures, given the importance of bilateral relations. According to a May survey by the Automotive Management Center, auto companies are actually more than 30% dependent on the Chinese market. Destatis pointed out that China was also by far the main supplier to German companies, accounting for 10.9% of total imports in the first quarter, far exceeding the Netherlands (7.6%) and the United States (7%). did.
