China was Germany’s most important trading partner for the eighth year in a row in 2023, according to the Federal Statistical Office of Germany, and this year marks the 10th anniversary of the establishment of the all-round strategic partnership between the countries.

German Chancellor Olaf Scholz embarked on a three-day visit to China on Sunday at the invitation of Chinese Premier Li Qiang. Scholz is being accompanied by senior representatives of a number of renowned German companies, including Siemens, Bayer, Mercedes-Benz, BMW and Zeiss.

“His visit aims to strike a balance in Germany’s China policy. Companies, especially the big ones, are actually against de-risking or decoupling from China and believe China is one of the most reliable trade partners and economic partners, although they are also worried about the negative impact of geopolitical tensions and the United States’ demonization of China,” Zhou Hong, deputy chair of the Academic Division for International Studies at the Chinese Academy of Social Sciences, told CGTN when talking about the business delegation.

“Germany’s GDP growth rate is relatively low now. German companies are optimistic about China’s economic prospects, which is important to Germany,” the expert added.

China-Germany financial cooperation yields fruitful results

Financial cooperation between China and Germany began in 1985, including loan and grant cooperation and the promotion of loan cooperation. China and Germany have achieved fruitful results in financial cooperation over the past 40 years, according to the Chinese finance minister, who spoke at the China-Germany Dialogue Forum on Financial Cooperation in Beijing on Thursday.

“Up to now, the German government has committed a total of about 10 billion euros (about $10.65 billion) in loans to China, supporting more than 300 projects that cover 31 Chinese provincial-level regions,” said Chinese Finance Minister Lan Fo’an at the forum.

These projects involve industries and fields including ecological protection, energy and transportation, and urban infrastructure, and provide strong support for promoting the economic and social development of the regions where the projects are implemented, Lan said.

At the forum, State Secretary in the German Federal Ministry for Economic Cooperation and Development Jochen Flasbarth said he hopes both countries will cherish the trust established over the past 40 years, continue efforts for closer cooperation in the fiscal and financial fields, and jointly cope with challenges.

Germany continues to grow its economic ties with China. Direct investments made in the country rose by over 4 percent to a record 11.9 billion euros in 2023, according to calculations published by the German Economic Institute.

About a month ago, Chinese President Xi Jinping visited BASF Shanshan Battery Materials Co., Ltd., a Chinese-German joint venture during his inspection tour to central China’s Hunan Province.

Opposing de-risking from China

The three-day visit to China is Scholz’s second since taking office. He paid an official visit in 2022, a year that marked the 50th anniversary of China-Germany diplomatic relations.

When meeting with Scholz in 2022, President Xi noted the complex and fluid international landscape and underscored the need for China and Germany to work together in times of change and instability and contribute more to world peace and development.

“China is an important trading partner for Germany and for Europe as a whole. Germany firmly supports trade liberalization, supports economic globalization, and opposes decoupling. Germany stands ready for closer trade and economic cooperation with China and supports more mutual investment by Chinese and German businesses,” Scholz said during his last visit.

“In recent years, the China-Germany relationship has seen steady progress. The two sides have witnessed frequent high-level exchanges and deepened practical cooperation in various fields, especially in economy and trade,” Liu Zuokui, deputy director of the Institute of European Studies at the Chinese Academy of Social Sciences, told CGTN.

“As a ‘bellwether’ of China-European Union (EU) cooperation, Scholz’s visit sets a good example and will continuously inject momentum into the steady development of China-EU relations,” Liu added, noting that the two sides are also expected to talk about peaceful approaches to resolving global hotspot issues.

https://news.cgtn.com/news/2024-04-15/Why-is-China-Germany-economic-cooperation-important–1sOlOXjWuiI/p.html