Solar panels, electric cars, wind turbines, cheap clothing and plastic junk from the online retailer Temu – wherever you look these weeks, the flood of Chinese goods is rising everywhere. Because economic growth is falling, the severe real estate crisis is weighing on people’s minds and consumer spending in China is continuing to decline, the industrial groups there only see one way out: they sell their products abroad at any price. And in doing so, they export their problems primarily to Europe.
Many Chinese manufacturers are sitting on huge excess capacity. A tough price war is already raging on the Chinese domestic market. Abroad they offer their goods at dumping prices in order to keep their factories at capacity. Jörg Wuttke, the long-time President of the European Chamber of Commerce in Beijing and probably the best German expert on the Chinese economy, puts it in a fitting term: “China produces, but without profit.” His best example: The Chinese industry has enough production capacity for the production of solar panels to meet the entire world demand at least 2.5 times. Manufacturers are therefore determined to force all their competitors from other countries out of the market.
The large glut of goods from China is likely to lead to serious additional conflicts with the EU. The demand for anti-dumping proceedings is becoming louder and louder in Europe. And more and more industries are joining the lawsuits. Conversely, China is threatening harsh counterattacks if there are import restrictions in the EU. The stupid ones would then be the German car manufacturers, for example, who are dependent on the Chinese sales market.
The flood of Chinese exports is further poisoning the negotiating climate with the Brussels EU Commission, which is already heavily burdened by many sources of conflict. The debate about decoupling, the restriction of high-tech exports and investments, the growing complaints about human rights violations, for example in the forced labor province of Xinjiang – from the perspective of the Chinese Communist Party, all of this is condensing into a single conspiracy against their country. Conversely, most EU countries are reacting more and more sensitively to the aggressive rhetoric of the Chinese leadership, the increasingly loud saber rattling against Taiwan and the increasingly open support of Russia in the war against Ukraine.
Every child in China knows the slogan of the communist founder Mao Zedong: “A spark can start a steppe fire.” Although it was meant differently, it still accurately describes the current situation: another relatively small dispute could be enough to send economic relations between the EU and China into an ice age. Europe can only rely to a very limited extent on economic reason in Beijing. Under the autocrat Xi Jinping, the stability of the communist regime enjoys absolute priority. And Beijing sees the flood of exports to Europe primarily as an outlet to keep the Chinese people’s growing dissatisfaction with economic conditions in check and thus prevent political resistance from developing.
This article first appeared in the business magazine “Capital”, which, like stern, is part of RTL Deutschland.
