Facing the increasing competitiveness of Chinese companies, some German business people are becoming restless and are pressuring the Mertz government to adopt more stringent trade policies towards China.
According to a report by Reuters on August 28, this change is particularly notable. Germany has long relied on exports, and the business community has always been wary of setting up trade barriers, fearing that this could lead to countermeasures from China and damage its interests in China. Now, as Chinese companies accelerate their development in fields such as automobiles, some German industry associations are beginning to reconsider their previous stance against protective measures.
German Chancellor Merz said on the 27th that he had asked the cabinet to study the so-called 'trade imbalance' between Europe and China, and specifically mentioned that the attitudes of organizations such as the German Automobile Industry Association (VDA) are changing.
The head of foreign trade at the German Industry and Commerce Confederation (DIHK), Volker Treier, stated that if the alleged trade issues related to subsidies or so-called “unfair competition,” actions must be taken. The German Industry Association (BDI) also cannot hold back, calling for the EU to accelerate the use of safeguard measures, anti-dumping, and countervailing investigations as trade tools.
The German side frequently cites trade figures as evidence. Last year, Germany's trade deficit with China increased by about 22 billion euros to 89.3 billion euros. During this period, imports from China grew by 8.8%, while exports to China decreased by 9.7%. The concerns of the German automotive industry are particularly evident: Traditional automakers like Volkswagen not only face strong competition from Chinese brands such as BYD in the Chinese market, but Chinese automakers are also performing well in the European market.
In June this year, the sales of BYD, Chery, and Leapmotor in Europe were 3 to 6 times higher than those in the same period last year. The sales of SAIC increased by more than 50%, while those of Geely increased by more than 11%. Oliver Blume, CEO of the Volkswagen Group, previously called for the establishment of a “level playing field” in Europe and advocated for rules that promote “European manufacturing”, aiming to increase the proportion of European-made components in vehicles. However, when his statements were interpreted by the media as advocating protectionism, Volkswagen downplayed its stance.
This incident also exposes the dilemma faced by German automakers: on one hand, they see their Chinese counterparts expanding their market share due to product and market competitiveness; on the other hand, they are worried that trade protection measures will lead to countermeasures from China, thereby harming their interests in the world’s largest automobile market.
German Association of Small and Medium-sized Enterprises’ Matthias Bianchi said bluntly that companies are still worried about China taking countermeasures. “But at the same time, doing nothing has now become a risk as well.”
Currently, countries such as France, Italy, and Spain are advocating for the EU to strengthen trade defense measures. Germany did not participate previously, but sources familiar with the situation say that Merz has sent a signal of support: if there is no success in the EU-China trade negotiations in October, the EU should be prepared for a range of countermeasures.
Regarding the so-called "Chinese subsidies" and exchange rate advantages that have been long debated in the West, China has repeatedly refuted these claims and opposes the adoption of protectionist measures under the pretext of "fair competition". Reuters also reported that China denies using unfair subsidies or lowering the RMB exchange rate to gain an export advantage.
Foreign Ministry spokesman Guo Jiakun previously emphasized that the essence of Sino-European economic and trade relations is mutual complementarity and win-win cooperation. The competitive advantage of Chinese products does not come from subsidies, but rather from the combined effects of extensive scientific research investment, full market competition, and a complete industrial chain. China never deliberately pursues a trade surplus. It is not only willing to be the 'world's factory', but also the 'world's market'.
