The German Federal Federation of Industry (BDI) published an analysis paper on March 11 on the content of the government work report during the two Chinese sessions. The analysis by Joachim Lang, the organization’s director general, states that “the increasingly strict orientation of Chinese economic policy toward the goals of technological and economic independence makes global cooperation more difficult in perspective.” According to the Federation of German Industries, the EU should take a tougher approach to protect European companies from unfair trade practices in China because the Chinese government has not fulfilled its promise to further open up its economy.
The Bundesverband der Industrie is the core organization of German industry and industry-related service providers. It represents 40 German industry associations and more than 100,000 companies with approximately 8 million employees. In recent years, China has become Germany‘s most important trading partner, and exports of German-made goods to China have helped buffer Europe’s largest economy from the domestic impact of the new crown Epidemic since the pandemic.
Through its analysis of China’s 14th Five-Year Plan, German industry has ignored clear signals of real change (on the Chinese side) toward an open and market economy, Lang said. A successful partnership, he said, “can only work if it is based on the principle of reciprocity and the establishment of a level playing field.” He suggested that Beijing, for its part, must do more to deliver on its commitment to open up its economy.
Lang noted that while the EU has made some progress in building a more balanced economic relationship with China through the China-EU Comprehensive Investment Agreement, the agreement has also shown the limits of their cooperation. He stressed that “the EU must continue to take a multi-pronged approach, seeing China as a partner, a competitor and a systemic adversary.”
Lang spoke of German industry’s desire for the EU to strengthen its defensive measures against China’s unfair trade practices by implementing a strong countervailing mechanism and completing the work of the international government procurement mechanism. He added that the EU should work closely with the U.S. and Japan in this regard. The German Federal Confederation of Industry also told Beijing House that its human rights record could harm future business relations.
“The human rights situation in Xinjiang and the political situation in Hong Kong put pressure on political and economic relations,” Lang said. He added that “China’s tough stance in Hong Kong and the situation in Xinjiang are already weakening the prospects for a successful ratification of the EU investment agreement.” The report by the Federal Federation of German Industries concludes by stating that “the biggest risk to German companies’ business prospects in and with China is currently political. The human rights situation: the human rights situation in Xinjiang and Hong Kong has strained relations between Hong Kong and Xinjiang.”
The report continues, “EU and US: the US government has imposed sanctions and the EU is currently drafting a new supply chain law, which could lead to increased tensions with China. Hot spots of risk have also emerged over Taiwan and the South China Sea. Here, the Chinese government’s unyielding hard line leaves less and less room for us.” The report states, “Compromise solutions: Geopolitical and ideological conflicts are therefore likely to continue to affect our lives. Therefore, it will continue to affect Germany’s economic interests.”
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