In German trade, US may surpass China in 2024 amid geopolitical tensions and weak investments
The report also said that the real estate crisis, geopolitical tensions in relations with the US and the EU, and weak industrial investments have contributed to this evolving trend.
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Based on Germany Trade and Invest calculations, German exports and imports to China totalled around €254 billion (US$275 billion) in 2023.
China “has been the most important trading partner for [Germany] since 2016”, said Christina Otte, an economic expert with Germany Trade and Invest who authored the report. However, she noted that, “in 2023, imports from China fell by around 19 per cent, and German exports to China fell by around 9 per cent”.
As a result, China’s lead over the US had dwindled to just €1 billion to €2 billion, the report explained. That marked a big drop-off from 2022, when the gap between China and the US was “huge”, at about €50 billion, as €300 billion worth of goods were traded between China and Germany.
China’s customs figures also show that Germany was China’s seventh-largest trading partner in 2023, with bilateral trade totalling US$206.7 billion, down 8.7 per cent, year on year.
Chinese electric-car manufacturers … are preparing for major expansions
In addition to “de-risking” calls, the survey showed that German companies operating in China were facing a range of challenges, including increased competition from local companies, unequal market access, economic headwinds and geopolitical risks.
Germany has always been a crucial player in trade between China and the European Union, but the innovation bar has also been raised for German firms because Chinese companies have ramped up their competitiveness in the industrial and automobile sectors.
“[China] will have overtaken Japan as the world’s largest exporter, in terms of car sales, for the first time in 2023,” Otte said in her report. “Chinese electric-car manufacturers, in particular, are preparing for major expansions and are increasingly pushing into the international market.”
Official Chinese customs data for 2023 showed that Germany accounted for nearly 15 per cent of China’s total export value of lithium batteries – an important component for electric vehicles. That put Germany second behind the top-ranked US at 20 per cent.