According to calculations, China could lose its position as Germany’s most important trading partner this year. “China’s dominant position in foreign trade with Germany is crumbling,” writes the federally owned German foreign trade company Germany Trade and Invest (GTAI) in a study. Both exports and imports recorded a significant decline last year.
The poor German-Chinese trade is primarily due to China’s weakening economy. “The real estate crisis, geopolitical risks in relation to the USA and weak industrial investments contribute to this,” it said. German companies also changed their strategy on the Chinese market.
On the one hand, according to GTAI, they are trying to avoid China in procurement. On the other hand, more and more companies are shifting their focus to the local market – true to the motto: “in China for China”. Both weaken German-Chinese trade.
Who takes China’s top spot?
Under these circumstances, the total value of imports and exports with China shrank by 15 percent to 254 billion euros last year, according to GTAI projections. Things are different with the US economy, which is developing surprisingly robustly.
Depending on the calculation, the USA would only be one to two billion euros behind China as a trading partner. “If these trends continue in 2024, the USA will replace China at the top of the ranking of Germany’s most important foreign trade partners.”
Imports from China fell particularly significantly last year. According to projections, they shrank by 19 percent compared to the previous year. Imports of chemical products collapsed, falling by 70 percent. In addition, Germany imported significantly less furniture as well as textiles, clothing and shoes. “As a major exception” things went uphill with imports of Chinese motor vehicles including spare parts. They increased by almost 36 percent.
As a purchase market, China remained in fourth place among German partners last year. Nevertheless, the country is losing importance, according to the GTAI. There was a sharp decline in exports of cars, chemical products and pharmaceuticals.
