Post by account_disabled on Feb 24, 2024 23:43:39 GMT -5
Germany's central bank says an overGermany's central bank says an overreliance on trade with China is one of the main reasons why the country's "business model is in danger," adding that high energy prices and labor shortages work are also weakening Europe's largest economy. The Bundesbank warned on Monday that 29 percent of German companies import essential materials and spare parts from China, exposing their operations to "significant" damage if this trade route were disrupted as a result of "growing geopolitical tensions." "Recent years have revealed the risk to economic development that comes from strong unilateral dependencies on primary products from abroad," the central bank said in its monthly report. "There is still a need to reduce dependence on China, especially in the case of primary products that are very difficult to replace." The stark warning came as German Foreign Minister Annalena Baerbock called on Europe to reduce its dependence on China and expressed support for the EU's investigation into Beijing's subsidies for electric vehicles. "If you're tied up too much, you can put yourself in danger," Baerbock told Bloomberg TV on Monday.
His comments echoed the new China strategy adopted by Berlin in July, when companies were asked to reduce their dependence on Beijing and warned that the government would not foot the Job Function Email Database bill if they fell victim to rising geopolitical risks. Faltering trade with China, Berlin's biggest trading partner, is one of the reasons why the German economy has contracted or stagnated over the past nine months and the IMF predicted it would be the worst-performing major economy this year, predicting that growth will contract by 0.3 percent. In a weekend interview with Welt am Sonntag, Chancellor Olaf Scholz attributed Germany's stagnation to the "weakness of some of our export markets, particularly China," adding: "For an exporting nation like ours, that "It has an effect.
It also cited high inflation, including a surge in energy prices after Russia's large-scale invasion of Ukraine in February 2022, higher interest rates that had hit Germany's construction industry, and the persistent disruption that the Covid pandemic had caused to global supply chains. Recommended Visitors look at a Cyberster electric car from the Chinese brand MG. Scholz said his government was trying to ease the cost burden on businesses by rapidly expanding wind and solar energy. But he acknowledged that excessive bureaucracy was slowing the push to expand renewable energy. China is an important market for German cars and machinery. But exports to China only account for 3 percent of German value added, while the country's imports from China are much larger. "A sudden separation from China would likely be associated with far-reaching disruptions to supply chains and production in Germany, at least in the short term," the German central bank said.
His comments echoed the new China strategy adopted by Berlin in July, when companies were asked to reduce their dependence on Beijing and warned that the government would not foot the Job Function Email Database bill if they fell victim to rising geopolitical risks. Faltering trade with China, Berlin's biggest trading partner, is one of the reasons why the German economy has contracted or stagnated over the past nine months and the IMF predicted it would be the worst-performing major economy this year, predicting that growth will contract by 0.3 percent. In a weekend interview with Welt am Sonntag, Chancellor Olaf Scholz attributed Germany's stagnation to the "weakness of some of our export markets, particularly China," adding: "For an exporting nation like ours, that "It has an effect.
It also cited high inflation, including a surge in energy prices after Russia's large-scale invasion of Ukraine in February 2022, higher interest rates that had hit Germany's construction industry, and the persistent disruption that the Covid pandemic had caused to global supply chains. Recommended Visitors look at a Cyberster electric car from the Chinese brand MG. Scholz said his government was trying to ease the cost burden on businesses by rapidly expanding wind and solar energy. But he acknowledged that excessive bureaucracy was slowing the push to expand renewable energy. China is an important market for German cars and machinery. But exports to China only account for 3 percent of German value added, while the country's imports from China are much larger. "A sudden separation from China would likely be associated with far-reaching disruptions to supply chains and production in Germany, at least in the short term," the German central bank said.