Reducing dependency on China, stronger trade relations with other countries – that is the main topic of an upcoming German business conference in Singapore. The President of the foreign trade association BGA, Dirk Jandura, put it in a nutshell: “Asia is more than just China.” Germany must do more to ensure good and reliable trade relations in the Asia-Pacific region.
Siemens boss Roland Busch, chairman of the Asia-Pacific Committee of German Business, said that diversification would be a key issue – with the aim of reducing dependencies and avoiding one-sided risks. “Politicians can support this by quickly concluding trade and investment agreements with as many countries as possible in order to facilitate access to new markets. Industry President Siegfried Russwurm said: “The lesson from Russia’s war of aggression in Ukraine is to avoid one-sided dependencies .”
Federal Economics Minister Robert Habeck (Greens) and Federal Chancellor Olaf Scholz (SPD), each accompanied by a business delegation, are also expected at the Asia-Pacific Conference of German Business from Sunday to Monday. The federal government is currently working on a new China strategy.
“Turning point” in trade policy
Busch said Asia-Pacific is the most important non-European region for German trade and investment. “It is a dynamic growth region, in which about half of the world’s population lives. Half of the global economic growth in the next ten years will come from Asia. In particular, the innovative strength in many countries in the region and the affinity for state-of-the-art technologies can also be an enrichment for Germans represent companies active in Asia Pacific.” At the same time, German companies could support the sustainable restructuring of the region’s economies with their know-how in environmental technologies.
Russwurm said: “A diversified economy reduces the risk for companies and economies, especially in crisis situations. Discussions on how to deal with economic dependencies and build resilience remain necessary – especially, but not only with regard to China.”
The head of foreign trade at the Association of German Chambers of Industry and Commerce, Volker Treier, said: “Even if the development of new production facilities and supplier structures is very time-consuming and costly, the urgent issue for German foreign trade is to focus more strongly on the Asia-Pacific markets beyond China to deliver.” The conference offers the necessary platform for networking between companies. The German government and the EU should work towards the swift conclusion of ambitious trade agreements with the countries in the Asia-Pacific region, particularly with Indonesia and India, but also with Thailand, Malaysia and the Philippines. BGA President Jandura said: “The turning point does not only apply to foreign and security policy. It also applies to trade policy.”
Managers warn against withdrawal from China
However, China is likely to continue to play an important role for the German economy. In a guest article for the “Frankfurter Allgemeine Zeitung” by several top managers such as Busch, BASF boss Martin Brudermüller or Schaeffler boss Klaus Rosenfeld it says: “Despite all the challenges facing China and with China, we are convinced that its basic growth dynamics exist remains. A withdrawal from China would cut us off from those opportunities.” The presence of German companies in China is particularly important in the interests of German economic power. This would secure jobs and livelihoods for many people in Germany. “More can be achieved by working together than by fighting against each other.”
However, the managers spoke out in favor of readjusting the relationships. The relationship between the two countries has changed a lot over the past few years. “China is increasingly asserting its position as a world power in terms of its development. This is reflected in the worrying tensions in the Taiwan Strait, which must be resolved peacefully. And the human rights situation in Xinjiang Province does not correspond to our values.” It is therefore correct that Germany is now defining its relationship with China in a more differentiated way – along the three dimensions of competition, cooperation and system rivalry. “Bringing this into a forward-looking balance is a difficult but necessary task.”
It goes on to say that risks in semiconductors, batteries, raw materials and rare earths, for example, must be diversified. “We will approach both new and existing partners – for example in Latin America, Africa and Asia.” In addition, German and European competitiveness must be greatly increased.
