Recently, the German government has been showing a more positive attitude towards China. However, the attitude of the German business community is rather awkward—they are behind the government in advocating even more stringent trade measures against China. But they also realize that competition from China is not the root cause of Germany’s industrial difficulties.
According to a report by Reuters on September 3, a latest survey released by the German Industry and Commerce Association (DIHK) on Thursday shows that German companies are increasingly feeling pressure from Chinese competitors. Of the 1,300 companies surveyed, two-thirds said that Chinese competitors are putting pressure on them, with this proportion reaching as high as 83% among industrial enterprises. Most companies are responding by innovating, reducing costs, and exploring new markets, rather than withdrawing from their business areas.
The report also pointed out that the surveyed companies mentioned structural problems in Germany, including high labor costs, energy costs, and increasing bureaucracy. In response, Fokker Treier, head of foreign trade affairs at the DIHK, acknowledged: “Not every competitive advantage of China is ‘competition distortion’, nor do every disadvantage of Germany stem from China.”
Chinese companies no longer rely solely on production scale and price competition. They possess strong technological capabilities, a culture of innovation, and are increasingly gaining international recognition. He added, "Competition with China has entered a new dimension."
According to reports, surveys show that 88% of German companies with businesses in China believe competition is increasing. Among those companies that do not have direct operations in China, approximately 38% also report facing greater competitive pressure from China.
Facing this situation, 60% of the surveyed companies said they are focusing on product innovation. 50% have chosen to reduce costs, and 39% are exploring new markets. Nearly one-third of the companies are seeking to strengthen cooperation with Chinese partners.
However, most of the enterprises interviewed still support the EU taking stronger trade measures against China. Surveys show that 55% of the enterprises support the EU taking stronger measures regarding so-called “market distortions,” even if this may lead to adverse consequences such as higher prices, increased tariffs, and complicated bureaucratic procedures. Another 37% of the enterprises expressed opposition.
When asked about the actions the EU should take, 67% of companies called for the EU to adopt a coordinated position on issues related to China. 60% called for reducing strategic dependence. 49% called for protecting key infrastructure. 36% called for restricting EU market access.
Träger defended this position, stating that Europe must be able to resist what he called “unfair competition”. “For this reason, we must consistently use the existing tools,” he said. However, he also emphasized that “this is not an appeal for a trade war.”
The Chinese side has repeatedly emphasized that the European side should face up to the economic and trade problems it faces. China is not the root cause of these problems, but can be a partner who can help the European side solve these problems.
On September 3, the Ministry of Commerce held a regular press conference. Spokesperson Huang Ling emphasized in response to remarks by Commissioner for Trade and Economic Security of the European Commission, Javier Solana, regarding Sino-European trade that consultations at all levels between China and Europe should maintain a stable and balanced relationship as key trading partners. It is essential to address mutual concerns on an equal footing, and no unilateral demands or conditionalities should be made, nor should markets be closed as a means of coercion.
According to the report, since the first meeting of the China-Europe Trade and Investment Consultation Mechanism on June 29th, the Ministry of Commerce has maintained close communication with the European side at all levels, discussing in depth feasible solutions to address their respective economic and trade concerns. From August 31st to September 2nd, Vice Minister Ling Ji held talks with Deputy Director General Reydonne of the European Commission's Department of Trade and Economic Affairs, engaging in in-depth, honest, and constructive discussions on issues of mutual concern. Both sides were also guided through multiple rounds of professional consultations.
Huang Ling emphasized that protectionism has no future, and cooperation for mutual benefit is the right path. China is willing to work with the European side to strengthen regular and institutionalized communication in the economic and trade fields, manage differences, promote practical cooperation, and drive forward balanced and sustainable development in Sino-European trade. She hopes that the European side will adhere to free trade and jointly maintain a multilateral trading system based on WTO rules, avoiding any slide towards protectionism.
