China overtakes US to become Germany’s top trade partner
Greater industrial complementarities drive growth
China became Germany’s largest trading partner for the first time in 2016, knocking off the US from the top spot it held in 2015, overseas media reported Friday.
The growth is partly driven by complementarities between China and Germany’s industries, Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday.
According to statistics from Germany’s Federal Statistics Office (FSO), the country’s imports from and exports to China rose to 170 billion euros ($180 billion) in 2016, surpassing the combined trade volumes of 167 billion euros between Germany and France and 165 billion euros between Germany and the US, Reuters reported.
China was Germany’s fourth largest trading partner in 2015 behind the US, France and the Netherlands, with a combined trade volume of a little over 163 billion euros, according to the FSO figures released on November 3, 2016.
The closer trade ties between Germany and China are also connected to the mood created by US President Trump’s protectionist stance and hostile attitude toward overseas trade partners, said Bai.
The Trump team claimed Japan, China and Germany have deliberately devalued their currencies to take advantage of the US on trade.
Trump had also threatened to slap a 35 percent border tax on German automobiles and a 45 percent tax on Chinese goods.
Just hours after Trump was sworn in as the US president on January 20, German Vice Chancellor Sigmar Gabriel, in interviews with local media, warned of a “rough ride” under Trump and suggested that Europe and Germany need a strategy geared toward Asia and China, should the US start a trade war with China.
In an interview with Reuters on Thursday, Trump reiterated his support for “a form of tax on the border,” saying it would bring companies back to the US and create jobs.
According to Bai, the industries between US and Germany bear similarities, giving the US more reasons to reduce trade with Germany. The industries in Germany and China, on the other hand, can complement each other.
“For example, Germany’s advanced technologies are very valuable to Chinese manufacturers, who are going through industrial upgrade,” he said.
He also noted that China’s “One Belt and One Road” initiative also provides many opportunities for cooperation between the two countries. However, trade between China and Germany also has some obstacles.
“For example, some German businesses in China have complained that China’s business environment is not fair enough”, said Bai.