Dependency trap

Economy: China now warns Germany

German Chancellor Olaf Scholz

(Bild: Kay Nietfeld / POOL / AFP)

China's head of state and party leader Xi Jinping has warned German Chancellor Olaf Scholz against economic protection measures. Germany and China depended on industry and supported free trade, Xi said.

"In this sense, both sides should guard against the rise of protectionism," he continued. According to him, Berlin and Beijing should also look at issues of production capacity objectively from the perspective of economic laws. Since the German government presented its China Strategy 2023, the aim has been to reduce dependence on the world's second-largest economy in critical economic sectors, thereby also reducing the risk for Germany.

Xi has now countered this by saying that cooperation between Germany and China does not represent a risk, but is "a guarantee for the stability of relations". The Chinese politician cited examples of industries traditionally strongly represented in China, such as mechanical engineering and the automotive industry.

China is damaging markets
Recently, the focus has been on the accusation that China is using state investment to ensure that Chinese companies produce too much and damage other markets with their cheap goods. Examples include electric cars, which are the subject of an EU anti-subsidy investigation, and the solar industry.

The Swiss-based solar manufacturer Meyer Burger recently closed its site in Freiberg, Germany - also citing the cheap solar cells from China. However, Beijing sees things differently: China's exports of electric vehicles, lithium batteries and photovoltaic products, for example, have enriched the global supply and contributed to the global response to climate change, Xi said according to Chinese sources.