‘Decouplers’ can’t have their cake and eat it

An article published on the official website of Deutsche Bundesbank, Germany’s central bank, claims that China “has severe economic problems to contend with that could also spill over to Germany”.

That has turned a blind eye to the Chinese economy continuing to be a main engine of world economic growth, with a contribution rate of over 30 percent. China’s GDP grew by 5.2 percent in 2023. Technological innovations, industrial upgrading, the accelerating of the country’s green transition and the development of the service sector inject new vitality into the economy.

Therefore the “severe economic problems” statement is wide of the mark. What makes the article interesting, however, is that even though it claims the Chinese economy is bad, it firmly opposes decoupling. An abrupt decoupling “as a result of a geopolitical crisis” would deal a heavy blow to German industry, in particular to sectors such as the automobile, mechanical engineering, electronics and electrical engineering that are all significantly reliant on the Chinese demand. A Deutsche Bundesbank survey found that nearly one out of every two companies in Germany’s manufacturing sector directly or indirectly sources critical intermediate inputs from China.

The article also admits that German companies have generated high sales and profits from production in and high revenues from exports to China, which echoes a report of the Chinese Chamber of Commerce in Germany that found more than 90 percent of the 566 responding German enterprises will stay in China while over half will even increase their investment in China in the coming two years.

Maybe it’s time more German and European policymakers and analysts listened to the voices of enterprises so as to arrive at conclusions that better fit the reality. —ZHANG ZHOUXIANG, CHINA DAILY