What is behind the German Finance Minister's statement about the dependence of Germany's economy on China?

The repercussions of the Ukrainian crisis did not stop at German-Russian relations and the ensuing problems between the two countries, especially in the field of gas. Rather, these events revealed strategic risks threatening the economy of the German state.

After the gas problem with Russia, German Finance Minister Christian Lindner blew a big surprise when he spoke of German economic dependency on China. "We have to diversify our trade relations, including our exports," he added.

Relationships tainted by caution

Despite the huge trade exchange between the two countries and Germany's dependence in many of its industries on China, there are tensions in the relations of the two countries as a result of political stances.

An example of this is what happened in 2021 when China warned the European Union of the danger of Lithuania's partnership with the government of Taiwan (and this is a red line in Chinese international relations when any country in the world establishes diplomatic relations with Taiwan).

German investors who have interests in China have become increasingly concerned, especially during the closures caused by limiting the spread of the Corona pandemic imposed on major industrial cities such as Shanghai and Shenzhen, which are major economic centers.

Sino-German relations became more tense with the European Union and America recently imposing sanctions on Russia due to its war with Ukraine;

Why are Chinese companies deprived of the Russian market?

The German government has also added pressure on China, criticizing China's persecution of Turkestan Muslims (Uyghurs), and accordingly many German companies intend to reduce their presence in China by half, while Beijing is trying to attract foreign direct investment by reassuring Europeans to invest in its country.

About half of German industrial companies rely on primary and important products sourced from China, led by car companies, and the volume of trade exchange between China and Germany in 2021 reached nearly $270 billion.

The volume of exports between the two countries

On the volume of trade exchange between China and Germany, Anas Hafez, an economist in China and Hong Kong, said that the volume of German exports to China amounted to about 123.7 billion dollars during 2021, led by the automobile industries with 28 billion dollars, followed by machinery and nuclear industries with 22.5 billion and then electrical equipment. $19 billion and other trade needed by China.

On the other hand, Chinese exports to Germany until February 2022 recorded a relative increase of 24.5% over the previous year, with exports reaching 122 billion US dollars.

Germany is the fifth trading partner among the countries of the world for China, and Germany occupies the position of the economic bridge and mediator for Chinese and European relations, and is the largest link in the supply chains between East and West.

Anas Hafez: The volume of German exports to China amounted to 123.67 billion US dollars in 2021 (Al-Jazeera)

Can Germany escape the Chinese trap?

What is happening now is a predicament in global capitalism, and not only in Germany. Global capitalism thought in the eighties of the last century that it needed to re-division of international labor in order to reduce the prices of its commodities, which suffer from high costs compared to competing commodities produced outside the capitalist system.

As well as trying to rid the capitalist production of the many and complex production and pricing restrictions in the capitalist economies, as those countries decided to transfer industries to countries characterized by cheap labor and market capacity, and the decision was to move east towards China and the Southeast Asia region, outperforming Western products that were suffering from a decline Its electronic quality in front of Japanese products due to the high prices of its raw materials and intermediates, and it returned in the new millennium to top the list of sales in the world again due to the Chinese production market and its Asian surroundings.

At this time, China was setting a big trap for the Western system, in the words of the international economist, Dr. Mahmoud Khaled Al-Musafir, as it linked the Western economies to the Chinese economy, which achieved huge profits at its expense that ensured its financial supremacy in the world.

Chinese economic expansion

And about the Chinese method of trying to control the Western economy, with Germany at its heart, Dr. Mahmoud Khaled Al-Mosafer told Al-Jazeera Net, "China did not stop at opening its markets to Western industries and providing great facilities to major companies, but in the other phase it bought a number of major international companies. It was not limited to A specific industry, a sector in itself, or a specific product, but rather the purchase of airlines, arms factories, car factories, major hotel companies, financial companies, football clubs and major gambling halls.

For example, its rail company, CREC, whose largest shareholder is the Chinese government, has become the largest rail maker in the world and today competes with the VDB Group.

The Chinese company acquired, in a short period of time, not exceeding a decade, most of the markets of the German group, which has been on the throne of this industry for a long period of time.

But in return, German car companies, including “Mercedes” and “BMW”, have been producing the highest types of electric cars in the world for two decades using raw materials produced in China, and the Chinese market has become the main market for German cars, which cannot easily be abandoned. In addition, it is not easy to abandon the raw and intermediate materials supplied by China and the biosphere countries.

The latest figures confirm that monthly Mercedes-Maybach sales in China are equivalent to annual sales in global markets except for China, and in light of the closures in China in 2020 due to the Corona epidemic, Mercedes sales achieved an annual increase of 12% over the previous year.

And the year 2021 achieved sales higher than the previous year, by an amount of 8%, and economists expect that the year 2022 will witness a significant increase in sales of luxury cars in China.

He concluded his speech by saying that in light of the current circumstances and the Russian-Ukrainian crisis, which provided the conditions for economic as well as political repositioning, according to which Europe saw that it had been invaded by the Chinese economy, and that it was time to disengage.

Here comes the importance of the questions;

Can the western markets today absorb the millions of German cars produced for the Chinese market if that market was abandoned?

Can German industries abandon the Chinese primary and intermediate materials, which are characterized by their electronic superiority, and dispense with them in other countries?

The answer is no.