In view of Beijing’s threats against Taiwan and increasing political tensions, German industry is becoming more cautious in dealing with China. BDI President Siegfried Russwurm does not consider a decoupling to be sensible, but he calls on companies to take the risks into account. “The Russian attack on Ukraine has taught us that we have to be better prepared for extreme scenarios compared to autocratic states,” Russwurm told the German Press Agency.
“We should not fundamentally question economic relations with China, even in the context of the new system competition,” said the former Siemens board member. But according to Russwurm, better preparation for possible “extreme scenarios” should also apply to China. “We are aware of the current strong dependencies on semiconductors from Taiwan or, in the case of rare earths, from China, and we need to increase our resilience.”
Part of the solution is to diversify sales and procurement markets. “It doesn’t happen overnight,” Russwurm said. “Europe must be willing to invest in markets over the long term and help build them up, just like China once did.”
According to the Bundesbank, German companies had invested almost 90 billion euros in China by the end of 2020. “Overall, economic relations with China are still characterized by considerable asymmetries and unequal competitive conditions,” said Russwurm. The living conditions for posted workers have deteriorated significantly, as not only the BDI boss reports. “All of this weighs on the long-term outlook.”
The BDI hopes that the federal government will represent its own interests in a European-coordinated and self-confident manner – without immediately ruining relations with China. “We expect a prudent policy from the federal government that balances the risks of excessive dependencies with the risks of an overly confrontational orientation, in a European context,” said Russwurm.(dpa)