Injecting more stability into the global economy

A cargo terminal in Duisburg, Germany's Ruhr region, photographed March 28.

Photo by Xinhua News Agency reporter Zhang Fan

From April 14th to 16th, German Chancellor Olaf Scholz paid an official visit to China, and the delegation also visited China with a German heavyweight economic delegation, including the heads of many well-known enterprises such as Siemens, Bayer, Mercedes-Benz, BMW, and Zeiss. According to a Reuters analysis, the list of executives highlights the "important weight" of China as Germany's largest trading partner.

This year marks the 10th anniversary of the establishment of the all-round strategic partnership between China and Germany. Since the establishment of diplomatic relations between China and Germany more than half a century ago, the relations between the two countries have maintained a high level of development, with close high-level exchanges between the two countries and continuous deepening of practical cooperation. Experts pointed out that under the current complex and changeable international situation, Sino-German economic and trade cooperation is expected to expand the potential of cooperation in traditional fields, strengthen cooperation in new fields such as green industries and digital economy, and inject more stability into the global economy.

New investment scale –

Last year, German direct investment in China reached a record high

In Stuttgart, the capital of Baden-Württemberg, Germany, the 2024 "Invest in China" series of activities held recently in Germany was very lively. More than 300 political and business guests from China and Germany gathered to exchange views on topics related to investment in China.

"We have always felt strong support from the local government, and the difficulties and challenges we encounter are always solved through close cooperation with the local government. Von Reinersdorf, CFO of the German spring company Kern-Liebers, shared the company's experience in expanding the scale of its industry in China for more than 30 years. "A few years ago, we established our second branch in Tianjin, China, and we are confident that we can expand the market by expanding our presence in China. He said.

The popularity of "Invest in China" reflects the close cooperation between China and Germany in terms of economy, trade and investment. Ma Mingbo, chief representative of the Shanghai Representative Office of the German Chamber of Commerce and Industry, recently said that German direct investment in China will rise against the trend in 2023, which shows the confidence of German companies in the development of China.

According to a recent report released by the German Institute for Economic Research, the total amount of German direct investment in China reached a record 11.9 billion euros in 2023, a year-on-year increase of 4.3%. From 2021 to 2023, German companies will invest roughly as much as they did in China from 2015 to 2020. In addition, German investment in China accounted for 10.3 percent of Germany's total overseas investment in 2023, the highest level since 2014.

According to the German Federal Statistical Office, in 2023, China has been Germany's most important trading partner for eight consecutive years. Germany has been China's largest trading partner in Europe for 49 consecutive years. According to the statistics of the Ministry of Commerce of China, the trade volume between China and Germany accounts for one-third of the total trade between China and the EU, and the German investment in China accounts for one-third of the EU's investment in China.

"China remains extremely important for German industry, especially car manufacturers. German automakers and Chinese partners operate joint ventures in China, the world's largest automotive market. Reuters recently reported that in 2023, German direct investment in China will hit a record high, indicating that German companies continue to invest a lot of money in China. Large German companies such as BASF and Volkswagen continue to see their China business as a growth engine.

"The German business community's trust in the Chinese market stems from its long-term practical experience in operating in China. Investing in China has become a common need for Chinese and German companies and will help German companies to enhance their global competitiveness. German companies that are deeply involved in the Chinese market have maintained a rational attitude and full confidence in China, which is an important supporting force for the steady pace of Sino-German economic and trade cooperation. Sun Keqin, a researcher at the China Institute of Contemporary International Relations and vice president of the German branch of the China Society for European Studies, said in an interview with this reporter.

New areas of cooperation –

Brilliant cooperation in the green field

According to a recent report by Handelsblatt, Scholz's visit to China has signaled that the German government is seeking to expand cooperation with China in the fields of climate, environmental protection, and transportation. Deutsche Welle analyzed in the report that Germany stressed that Germany and China have close cooperation in all important economic and industrial fields, and also cooperate in science and technology and education.

"For a long time, China and Germany have benefited from each other's development. Sun Keqin analyzed that China and Germany are both big manufacturing countries, in the traditional cooperation fields such as automobiles, chemicals, power generation equipment, transportation, steel, communications, etc., the industrial chain and supply chain of the two countries are deeply embedded with each other, and there is both vertical cooperation and horizontal cooperation, and the markets of the two countries are highly interdependent. The cooperation between relevant enterprises of the two countries is conducive to improving their respective production efficiency and profits, and enhancing their international competitiveness.

Zheng Chunrong, director of the Center for German Studies at Tongji University, analyzed in an interview with this reporter that now, with China's vigorous development of new quality productivity and the continuous rise of industrial energy level, a series of supporting preferential policies and support measures are gradually being introduced, and many new cooperation opportunities have emerged between China and Germany in emerging fields such as green transformation, climate change, new energy industry, and digital economy.

The website of the Financial Times recently reported that the German Volkswagen Group's deliveries of electric vehicles and internal combustion engine vehicles in China grew strongly in the first quarter. Volkswagen Group reported that in the first quarter of this year, the company delivered 694,000 vehicles in China, a year-on-year increase of nearly 8%, of which electric vehicle deliveries increased by 91% year-on-year.

"Volkswagen's strategy in the Chinese EV market is taking effect. Ralph Brandstedt, Chairman and CEO of Volkswagen Group China, said that the Group's electric vehicle deliveries are growing rapidly at the same time as the market share of internal combustion engine vehicles in China is also growing.

There are many more German companies like the Volkswagen Group. The continuous growth of business in China has given many German companies confidence in the Chinese market. Matthias Müller, general manager of the German chain consulting company, said that China is one of the largest markets in the world and still has great potential for development, and nearly 10,000 German companies are active in China, which proves the attractiveness of the Chinese market.

"Consolidating the existing achievements of cooperation between China and Germany and expanding new directions of cooperation is in line with the interests of the two countries and the objective law of economic globalization, and is also conducive to promoting the common development of the two economies. Zheng Chunrong said.

New Prospects for Cooperation——

Convey a signal of support for economic globalization

According to the Business Confidence Survey 2023/2024 published by the German Chamber of Commerce in China, more than half of the German companies surveyed plan to increase their investment in China in the next two years. According to the report, China is of great importance to the German economy. With its large consumer market, advanced supply chain infrastructure and growing capacity for innovation, China remains one of the most important markets for German companies.

"Germany is one of the most influential countries in the European Union, and its China policy has a certain role as a bellwether in Europe. Scholz's visit to China conveyed an important signal that Germany hopes to continue to carry out pragmatic economic and trade cooperation with China, and shows that German companies still value the development opportunities and cooperation potential of the Chinese market, and vote of confidence in China's economy with actions. Zheng Chunrong analysis, at present, to boost the economy is an important task for the German government to solve, strengthening economic and trade cooperation with China can promote the German economic recovery to provide important external support, help improve the domestic economic situation in Germany. In the complex and volatile international situation, close high-level communication between China and Germany plays an important role in promoting practical cooperation between the two sides and boosting the confidence of European countries in exchanges with China.

In February this year, Scholz said during the Munich Security Conference: "Germany's economy is deeply integrated into globalization and its development benefits from free trade, Germany opposes protectionism, opposes 'decoupling and broken chains', is happy to see China's development and revitalization, and is willing to provide a high-quality business environment for enterprises from other countries in Germany." At a difficult time for the international situation, Germany is ready to work with China to play an active role in maintaining peace and stability. Friedrich, chairman of the German-Chinese parliamentary group of the German Bundestag, recently stressed that German-Chinese economic and trade cooperation is a model of globalization, and the two countries should work together to meet challenges and bring greater certainty to German-Chinese business cooperation.

According to Sun Keqin's analysis, for a long time, Sino-German relations have had a solid foundation. Scholz visited China for the first time in October 2022 and is the first European leader to visit China since the outbreak of the pandemic. Since then, a new round of Sino-German government consultations has been successfully held, dialogue and exchanges at all levels have resumed rapidly, and cooperation projects have continued to advance. At present, under the pressure of the EU's so-called "de-risking", Scholz insists on maintaining effective communication with China, promoting practical cooperation, stabilizing, consolidating and developing bilateral relations, and sending an important signal to other countries that he supports economic globalization and trade liberalization and opposes "decoupling and breaking chains". China and Germany weaving a dense economic and trade network and strengthening coordination and cooperation in international affairs will not only inject impetus into global economic growth, but also play a positive role in world peace and prosperity. Reporter Gao Qiao

Source: People's Daily Overseas Edition