Effects of the “turning point”
Exports to China collapse by almost 20 percent
February 14, 2024, 12:24 p.m
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Trade relations with China are still the most profitable for Germany, but only just ahead of the USA. But the trend is clear: fewer goods are being exported and imported. Economists see the effects of a changed German policy here.
In 2023, China was Germany’s most important trading partner for the eighth year in a row. However, the exchange of goods with the People’s Republic fell significantly, while the importance of the USA increased slightly, as the Federal Statistical Office in Wiesbaden announced. According to experts, German companies are trying to reduce their dependence on China. According to statisticians, at 253.1 billion euros, the trade volume with China last year was only slightly higher than that with the USA (252.3 billion euros).
The value of Chinese imports in particular fell by 19.2 percent to 155.7 billion euros last year. China remained by far Germany’s most important supplier country. The export value fell by 8.8 percent to 97.3 billion euros. So there remained a trade deficit with China of 58.4 billion euros, after reaching the second highest value ever in 2022 at 86.1 billion euros.
The USA has been the most important buyer of German products for years. At 157.9 billion euros, exports overseas increased again by 1.1 percent in 2023. Imports rose just as sharply, to 94.4 billion euros. The second most important buyer country last year was France with 116.8 billion euros, followed by the Netherlands with 111.5 billion euros. The Netherlands also ranked third in trade volume with exports and imports totaling 214.8 billion euros.
“The geographical breakdown of exports shows the weakness of the Chinese economy,” analyzed the scientific director of the Institute for Macroeconomics and Economic Research (IMK) of the Hans Böckler Foundation, Sebastian Dullien. However, the slump was stronger than could be explained by this alone.
“Rather, you can already see the geoeconomic shifts in the trade figures with China as a result of the much-vaunted ‘turning point’,” explained Dullien. In view of a possible conflict between the People’s Republic and Taiwan and a confrontation between the USA and China, German companies purchased less from China and diversified their supply chains.
Germany exports fewer cars
According to the information, the most important German export industry was once again the automobile industry. In 2023, motor vehicles and vehicle parts worth 268.2 billion euros were exported from Germany – 8.9 percent more than in 2022. Machinery and chemical products followed in second and third place.
When it comes to imports, motor vehicles and motor vehicle parts also took first place with a goods value of 148.5 billion euros. Germany also imported a particularly large number of data processing devices, electrical and optical products and electrical equipment.
According to the statistics office, the total export value last year was 1,562.4 billion euros and the import value was 1,352.8 billion euros. “This means that exports fell by 2.0 percent and imports by 10.1 percent compared to 2022,” explained the statisticians. The export surplus was therefore 209.6 billion euros. In 2022 it fell to its lowest value in over 20 years due to the sharp increase in energy import prices.
According to the IMK’s assessment, exports are unlikely to make a noticeable contribution to the growth of the German economy in the current year either. Although energy prices have fallen, which should support production and exports in energy-intensive sectors, uncertainty about future energy price developments is likely to lead to some production being relocated to other countries, Dullien predicted.