China is no longer Germany’s largest trading partner

The trend remains to be confirmed, but the symbol is strong: China has lost the title of Germany’s leading trading partner. According to figures from the Federal Statistical Office (Destatis), published Friday May 17, the Asian giant fell behind the United States in the first quarter of 2024, just as in the third and fourth quarters of 2023. This change in hierarchy comes as economic and geopolitical tensions intensify between Washington and Beijing. For Germany, this is a turning point: China has been its largest trading partner continuously since 2015.

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Of course, this development owes a lot to the economic situation of recent months: Germany, in recession, imported less than in previous years, and Chinese demand, affected by the real estate crisis, has also shrunk. The volume of trade with China thus stood at 60 billion euros in the first quarter, compared to 63.2 billion with the United States, whose growth is sustained.

The effect could nevertheless be maintained, some experts believe. The German foreign trade agency, Germany Trade and Invest, estimated, in a study published in Januarythat, due to the Chinese real estate crisis and the increase in geopolitical risks with the United States, the People’s Republic could permanently lose its title as Germany’s leading trading partner.

Diversification of suppliers

This trend also reveals a lasting transformation in German production structures: large industrial groups, particularly automobile groups, have an increasing tendency to produce on site in order to serve the market with the help of local partners, without going through exports. . And mid-sized companies are working to diversify their suppliers and customers outside China, to protect themselves from risks.

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Several specialists, however, warn of the impact that this trade war with China would have on the German economy in the event of retaliatory measures, as the links between the two countries remain important. Automotive groups are in fact more than 30% dependent on the Chinese market, notes a study of May from the Center of Automotive Management. And China remains by far the leading supplier to German companies, with 10.9% of total imports in the first quarter, recalls Destatis, well ahead of the Netherlands (7.6%) and the United States (7%). .

source site-29