‘China economic collapse’ theory is wishful thinking of anxious competitors: German politician
Published: Jun 19, 2024 07:02 PM
Photo: VCG

Photo: VCG

Editor's Note:

As the Chinese economy, along with the entire global economy, faces considerable challenges in recent years, some Western officials and media outlets have stepped up their long-standing smear campaign against the world's second-largest economy. They cherry-pick information and even distort facts to hype various specious narratives such as "Peak China," while turning a blind eye to China's considerable strengths and vast potential. 

As part of the Global Times' multimedia project to set the record straight, the opinion page is publishing a series of in-depth interviews and signed articles with economists, experts and scholars from different countries who share their views on the prospects of the Chinese economy and debunk Western rhetoric.

In the fifth article of the series, Global Times (GT) reporter Su Yaxuan talked to German politician Dr Walter Doring (Doring), chairman of the Senate of Economy Europe and initiator of the Summit of World Market Leaders. Doring noted that the "China economic collapse" theory is wishful thinking of anxious competitors.

GT: What do you think of the economic cooperation between China and Germany? 

Recently, I have attended two forums about the cooperation between Germany and China. There are many German municipalities that have entered into partnerships with Chinese cities, and there is plenty of potential for growth. We should expand these municipal partnerships. This way, multiple goals can be pursued and achieved simultaneously: more personal contacts, more cultural exchanges, more collaboration between research institutions and universities, and of course, more economic relations between companies in these German and Chinese partner municipalities.

GT: In an interview, you mentioned that these forums are a rebuttal to the "decoupling" between the two sides because German and other European business leaders are willing to cooperate to achieve prosperity across open borders. Will European companies stop cooperating with China due to policies related to "decoupling" or "de-risking"? Do you think China's development currently poses a risk to the EU? 

Companies obviously do not favor "decoupling," otherwise, so many entrepreneurs from Europe would not have participated in forums. The numbers and facts also show that German companies think differently than some German politicians and media: In 2023, trade relations between Germany and China were higher than ever before.

"De-risk" is a compromise between "decoupling" and "leaving everything as it is." Every entrepreneur knows that it is not good to be overly dependent on a single market. The technical term for this is "concentration risk." It is better, even necessary, to be as broadly positioned as possible, in other words, to be active in multiple markets. "De-risk" is therefore not related to China alone but applies equally to all markets, including the US, Japan and even the European market. Relating "de-risk" solely to China is thus both factually incorrect and a form of verbal discrimination against China.

GT: Why have you stated that the idea of China having "overcapacity" is "just nonsense"?

"Overcapacity" is a completely inappropriate term for exports. Exports, regardless of the country, are not to be criticized. Germany was the world's export champion for many years. The Germans successfully exported their machinery and, above all, their cars all over the world. I have never heard the nonsensical accusation of "overcapacity" against Germany. Exports are a crucial contribution to securing and expanding the prosperity of the exporting country. This pursuit of prosperity for its citizens must be granted to every country.

If a country is particularly successful in exports, it offers customers advantages with its products, otherwise, the customers would not buy them. Every export success is a contribution to the competition. Competition drives innovation, and innovations are the drivers of product improvements and global market leadership.

GT: How do you understand China's contribution to the world in the development of new energy?

China makes a significant contribution to the transformation toward renewable energies. Wind power, solar energy, and, last but not least, the enormous development of e-mobility show the efforts China is making.

GT: Recently, Europe followed the US in increasing tariffs on Chinese new-energy products due to China's "overcapacity." What consequences will this bring?

Some European states will, some will not.

Since we rely on free trade, we are concerned about the continuous efforts by an increasing number of states to raise tariffs. Higher tariffs, regardless of who imposes them, always harm free trade, hinder progress, and threaten to lead to a loss of prosperity. Subsidies are on the same level. They may be suitable for achieving short-term advantages at best. In the medium term, they prove to be just as harmful to all parties involved as constant tariff increases.

GT: You have said that China has the largest market. China's economic growth target for 2024 is around 5 percent. How do you analyze this target? What opportunities do you think China can bring to Europe?

The enormous Chinese market opens equally enormous opportunities for European companies. China can offer European companies many incentives: more legal security, better intellectual property protection, and easier market access.

There are several world market leaders who openly admit that China has been, and continues to be, an enormous challenge for them, but it has also been very instructive, allowing them to enter the international competition, strengthened with new experiences.

GT: You mentioned that you do not agree with the "China economic collapse" theory. Could you please provide reasons for this?

There is no verifiable argument that China will "collapse." Recently, I was able to witness the high performance of the Chinese economy both in Beijing and Yangzhou. Not only the very modern electric vehicles with long ranges and outstanding interior fittings but also the high degree of digitalization, the very convincing presentation techniques, and last but not least, the super-fast trains - we traveled from Yangzhou to Shanghai and were thrilled - demonstrate China's impressive level of innovation and its brilliant future prospects. The "China economic collapse" theory is wishful thinking of anxious competitors.

The diligence of the Chinese and the high number of university graduates in the field of engineering clearly show that the People's Republic of China has a bright future.

GT: With the rise of local Chinese companies, many multinational companies in China, including European companies, have stated that the competition in the Chinese market is extremely fierce, and China has become an "arena" for honing multinational companies. How do you view this observation from the perspective of frontline operators? In your opinion, what skills honed in China can help multinational companies better participate in global competition?

Every market has its own peculiarities and challenges. Every market where one wants to be successful must be carefully observed. Take automobile production: German and all European car manufacturers had to learn a lot from China to improve themselves. Battery production and e-cars became so good in China that German competitors entered into collaborations with Chinese companies to compete in the global market. The same applies to wind power and solar installations.

The rise of many Chinese companies reaching the top of the world is both a challenge and an opportunity. If we learn from each other and from the best, we will all benefit, and prosperity and quality of life will increase for everyone!