Value of cooperation and complementary industries recognized by Sino-German business experts

The economic and trade ties between China and Germany are expected to further strengthen through advanced manufacturing, green development and their complementary industrial structures, despite challenges facing global economic recovery, said business leaders and experts.

Amid growing pressure on the global economy, they emphasized that the two countries have played a crucial role in maintaining the stability of Eurasian production cooperation and the smooth functioning of the China-Europe freight train service, while supporting healthy development in relations between the European Union and China.

As both Chinese and German economies faced disruption from challenges like softening demand in global goods and geoeconomic fragmentation, their bilateral trade value amounted to 1.45 trillion yuan ($200.4 billion) in 2023, dropping 3.6 percent year-on-year, data from China's General Administration of Customs showed.

China exports mainly computers, mechanical and electrical products, base metals, chemical products, textiles, garments and household appliances to Germany.

Apart from vehicles and auto parts, mechanical appliances, toolmaking machines, precision instruments, motors, and electrical and pharmaceutical products, Germany's exports to China include daily necessities, excavator parts, optical instruments, sensors, steel plates and chemical products.

China's comprehensive manufacturing clusters, strategic location in the Asia-Pacific region and numerous free trade agreements with various countries are expected to offer advantages for multinational corporations seeking to leverage growth opportunities, said Shi Shiwei, a professor specializing in German studies at the Beijing-based University of International Business and Economics.

China's advanced supporting industries, free trade agreements such as the Regional Comprehensive Economic Partnership and China-Switzerland Free Trade Agreement, along with the tangible progress of the Belt and Road Initiative, will continue to enable multinational corporations to export products made in Chinese factories to other regions of the world, Shi said.

For example, data from the General Administration of Customs revealed that China's foreign trade grew by 8.7 percent year-on-year to 6.61 trillion yuan in the first two months. During this period, foreign-invested enterprises in China exported and imported goods worth 1.92 trillion yuan, which represented 29 percent of the country's total foreign trade value.

Taicang, a city in Jiangsu province neighboring Shanghai, has established itself as a hub for German companies in both China and the Asia-Pacific region due to its favorable business environment and significant enhancements in living standards.

Upbeat about the Chinese market, logistics conveying equipment manufacturer Beumer Group became the 500th German company to settle in Taicang in early January.

Rudolf Hausladen, CEO of the German company, said Taicang's well-developed business environment and its strong manufacturing foundation will benefit the company's growth in China.

The company will invest a total of 100 million euros ($108.74 million), with an annual output value of up to 1.4 billion yuan, in Taicang, according to information released by the local government.

Founded in 1935, Beumer Group has subsidiaries, production bases and offices in more than 70 countries and regions.

Since the arrival of the first German company in 1993, it took Taicang 14 years to attract the first 100 such companies, but only two years for the last 100 German businesses to settle in the city.

During an "invest in China"-themed roundtable meeting held in Munich, Germany, in early April, Ling Ji, vice-minister of commerce and China's deputy international trade representative, said that trade between China and Germany accounts for one-third of the total trade between China and Europe. German investment in China accounts for one-third of the EU's investment in China.

"The economic and trade relationship between China and Germany has formed a mutually beneficial situation. Investing in China has become a common need for the development of both Chinese and German enterprises and helps to enhance the global competitiveness of German companies," said Ling during his meeting with senior executives of German companies including Siemens and BMW Group.

China hopes that German businesses will seize the opportunities presented by the development of China's digital economy and green transformation, and strengthen cooperation in fields such as electric vehicles, clean energy, biopharmaceuticals and artificial intelligence to promote greater development in Sino-German economic and trade relations, Ling added.

The leaders of German businesses said that China is one of the most important markets globally and plays a key role in the world's industry and supply chains. German companies have grown in the context of economic globalization, adhere to free trade, welcome competition from emerging markets, and oppose protectionism and "decoupling" from China.

Zeiss Group, a German manufacturer of eyeglass lenses and ophthalmic instruments, launched a new quality excellence center in Dongguan, a manufacturing hub in Guangdong province, in late March.

The facility, with the largest investment among such centers in China, houses multiple functions, including demonstration, measurement, training, certification, technological consultation and computer programming service.

"The government has vigorously promoted the acceleration of high-quality development and unleashed new quality productive forces this year to accelerate the transition of the Chinese economy from quantity to quality based on innovation," said Maximilian Foerst, president and CEO of Zeiss China, at the launch ceremony.

"Zeiss continues to increase its investment in China and we are committed to pioneering innovative technologies, serving as an essential catalyst for enhancing industry quality and productivity," said Foerst.

China is the single largest and fastest-growing market globally for Zeiss, and industry momentum is growing, he added.

"The Guangdong-Hong Kong-Macao Greater Bay Area is extremely active in the areas of electronics, new energy and new energy vehicles," Foerst said, adding the company will enhance its cooperation with Chinese companies because many of them are becoming leaders in those fields.

"Many countries' surging demand for infrastructure improvements — such as next-generation oil refineries, new energy vehicles, modern factories, roads, airports and container ports — will provide opportunities for both German and Chinese banks, project design firms and contractors, material and equipment manufacturers," said Zhang Yongjun, deputy chief economist at the China Center for International Economic Exchanges in Beijing.

"China's proposal for third-party market cooperation in the BRI could benefit both Western and developing economies without causing a clash of interests," he said, adding that the BRI-related infrastructure and business activities can enhance the delivery of goods, services and cross-border investment worldwide, fostering synergy among the development strategies of partner economies.

China's nonfinancial outbound direct investment in countries and regions participating in the BRI came in at 33.18 billion yuan in the first two months of the year, an increase of 0.6 percent year-on-year, data from China's Ministry of Commerce showed.