GT Voice: Complementarity can support economic ties with Germany
Published: Apr 11, 2024 10:24 PM
Illustration: Chen Xia/GT

Illustration: Chen Xia/GT

With German Chancellor Olaf Scholz about to embark on his second official visit to China, renewed excitement has been sparked for the potential of enhanced economic and trade collaboration between China and Germany.

Scholz's visit undoubtedly provides a rare opportunity for the two sides to seek deeper cooperation and jointly tackle challenges in the context of the complex political and economic situation. 

However, even amid such high expectations, some Western media outlets have still chosen to turn a blind eye to the positive aspects of China-Germany economic relations and instead focus only on the challenges and difficulties. But given the high complementarities of both economies, such an attempt to destroy the cooperative atmosphere ahead of Scholz's visit won't hinder the development of bilateral economic ties.

A Reuters report claimed on Wednesday that a survey released by the German Chamber of Commerce in China revealed that nearly two-thirds of German firms said that they encounter unfair competition from local firms in China and are outgunned in terms of access to local officials, information and licenses.

But the actual theme of the survey is about German companies' unwavering confidence in China. According to the survey, as many as 79 percent of the German companies plan to continue their investments in China, indicating their optimism about the prospects of the Chinese market and their determination to dig deep into the Chinese market.

This year marks the 10th anniversary of the all-round strategic partnership between China and Germany. Despite geopolitical headwinds and "de-risking" hype in Europe, China-Germany cooperation has become increasingly close, with expanding areas of collaboration. 

Despite a decline in bilateral trade, German direct investment in China reached a record high last year, and its share of Germany's overall investments abroad also hit its highest level since 2014.

Under these circumstances, Scholz's visit, accompanied by a group of high-profile CEOs, underscores the importance that the German government attaches to further enhancing economic and trade ties with China. Not only do German companies want to continue to expand in the Chinese market, but the German government is keen on attracting Chinese investment. 

China looks forward to closer economic ties with Germany, fostering a mutually beneficial relationship that drives growth in both countries.

The high complementarity evident in China-Germany economic and trade cooperation is an important foundation for sustainable growth. In terms of trade and investment, Germany stands as China's top trading partner in Europe, while China represents a key export market and investment hub for Germany. 

Moreover, Germany excels in high-end manufacturing, engineering and technological innovation, while China boasts a vast market and a comprehensive industrial system. 

The competitive edge of Germany's small and medium-sized companies in their sectors underscores their exceptional growth potential in the Chinese market.

Additionally, with the global push for a green transition, there is great potential and ample space for cooperation between China and Germany in emerging areas such as new-energy vehicles, artificial intelligence and environmental protection. The combination of Germany's advanced manufacturing and technologies with China's huge market and massive manufacturing capability contributes to new growth points and development opportunities for bilateral industrial chain cooperation.

China-Germany cooperation also faces some challenges, such as market access and fair competition, among others. However, these challenges should not be an excuse to derail bilateral collaboration from its positive trajectory. Instead, they should serve as catalysts for enhancing exchanges and deepening cooperation. 

Only through dialogue and consultation can the two sides find ways to solve problems and unlock the full potential of their partnership, driving forward China-Germany economic and trade relations.