Over the past few months, there have been many reports of countries trying to reduce their economic dependency on China. However, despite these reports, nothing significant has happened yet. China still remains Germany’s most important trading partner, even though foreign trade decreased by 10.5 percent in the first quarter of this year.
It is clear that Chinese companies are expanding their businesses in Europe. One clear trend is that exports from Germany to China are decreasing, while imports from China to Germany are increasing. The import surplus reached a staggering 16.5 billion euros in the first quarter, according to the Federal Statistical Office.
The car industry is a specific sector that best reflects this trend. Germany exported mainly passenger cars and components worth 6.3 billion euros to China in the first quarter of 2023 – a decrease of 24 percent. Meanwhile, 28 percent of the electric cars imported into Germany came from China, compared to under 8 percent for the same period last year.
China also provides many raw materials. In the first quarter of 2023, 92 percent of the rare earth metals used in crucial key technologies like electromobility or wind power were imported from China. In the same period last year, the figure was 98 percent.
It is essential for countries like Germany to reduce their dependency on China, but the country will take time to find a suitable alternative trading partner.
