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| Germany's GDP could fall by 2% if it splits from China. |
On June 19, the German Association of the Digital and Electronic Industries (ZVEI) warned the German government about decoupling from China, emphasizing that the Asian country's market is of paramount importance to Europe's largest economy .
Speaking ahead of the 7th German-Chinese consultations taking place in Berlin, ZVEI Board Chairman Wolfgang Weber said that resuming political and business dialogue between Germany and China is very important.
In a statement on the same day, the association said that Beijing is by far the largest supplier of electronic and electrical engineering products to Berlin. It is also the most important export market for German industry along with the United States and the second largest location for foreign direct investment.
According to the German Federal Statistical Office (Destatis), China has also been Germany's most important trading partner for seven consecutive years.
In the first quarter of 2023 alone, bilateral trade reached 64.7 billion euros (71 billion dollars). During the same period, 86% of Germany's imports of laptops, 67.8% of smartphones and telephones, and 39.2% of lithium-ion batteries came from China.
German Finance Minister Christian Lindner also warned earlier this year of the consequences of decoupling from China, stressing: “This will not bring jobs in Germany. Many other countries will take our place.”
In addition, a recent study by the Austrian Institute for Economic Research (WIFO) shows that if Germany economically separates itself from China, its Gross Domestic Product (GDP) will decrease by 2% and this could cause a loss of nearly 57 billion Euros per year.
China is becoming increasingly important to traders across Europe, overtaking the US to become the European Union's (EU) largest trading partner in 2020.
According to official statistics, with traded goods worth 696 billion euros, the Northeast Asian country accounted for 16% of the bloc's total trade turnover in 2021.
“Trade between Europe and China is beneficial for both sides,” concludes ZVEI Board Chairman Weber.
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