China and Germany Jointly Enhance Cooperation

German Chancellor Olaf Scholz traveled to China for a three-day visit from April 14 to April 16, marking not only the first visit of a leader from a major Western country this year but also his longest overseas visit to any state.

The German newspaper Frankfurter Allgemeine Zeitung likened this visit to those during the Merkel era, indicating that Scholz will continue the tradition of pragmatic economic and trade cooperation between China and Germany established during Merkel's era.

German Chancellor Olaf Scholz listens to a question during a press conference in Beijing, China, April 16, 2024. /CFP

Sino-German economic and trade data remain high

Despite the changing times, the core theme of cooperation between China and Germany remains unchanged. German professionals in economics do not agree with the "de-risking" approach advocated by some politicians.

In 2023, German foreign direct investment in China registered a record high of 11.9 billion euros ($12.6 billion) and China's share of German foreign direct investment surged from 5.1 percent in 2019 to 16.4 percent in 2023.

With economic growth stagnating in 2023, the German economic community needs to strengthen cooperation with China. Large German multinational corporations, particularly those in the automotive industry, are increasingly confident in the Chinese economy. In 2023, 63 percent of the German automotive companies planned to expand their investments in China over the next two years, according to the Business Confidence Survey 2023/24 released by the German Chamber of Commerce in China.

A number of new energy vehicles are ready for export at Suzhou Port, China, December 13, 2023. /CFP

German automotive companies optimistic about Chinese market

Many executives from automotive giants such as Mercedes-Benz, BMW, and Volkswagen have visited China, which signals that China and Germany are expected to expand cooperation in the automotive industry.

Green hydrogen, electric vehicles and digital innovation offer new opportunities for Sino-German automotive collaboration.

BMW has expanded the scale of its research and development center in Shenyang and plans to invest in the production of next-generation high-voltage batteries for electric vehicles. Earlier this year, Bosch established Bosch Mobility China.

China's new energy vehicle production and sales have ranked top in the world for nine consecutive years, with rapid advancements in the intelligence segment. The country's strengths in new energy and digital industries can provide competitive products for the transformation of German cars.

German automotive companies that have been deeply rooted in China for many years have astutely captured these changes. According to data from AHK (German Chambers of Commerce) Greater China, 58 percent of the German companies believe that Chinese automotive companies will emerge as industry innovation leaders in the next five years, and 84 percent of the German automotive companies have increased investment in China to maintain competitiveness in the Chinese market.

Sino-German cooperation writes new chapter of mutual benefits

For the global dividends for enterprises, large German companies are the major forces championing Sino-German economic cooperation and opposing "decoupling."

The active participation of executives from Siemens, Merck Group, Bayer, Thyssenkrupp and other companies in this visit fully demonstrates the confidence of German companies in the Chinese market.

In recent years, Chinese enterprises' investments in Germany have focused on automotive manufacturing, renewable energy and high-tech industries. With both Chinese and German enterprises keen on cooperation, bilateral economic and trade cooperation remains a vital "engine" for writing a new chapter of cooperation between China and Germany.(Huang mengmeng，Assistant Research Fellow at the Institute of European Studies, Chinese Academy of Social Sciences )