The trend has yet to be confirmed, but the symbolism is strong: China has lost the title of Germany’s leading trading partner. According to figures from the Federal Statistical Office (Destatis), published on Friday, May 17, the Asian giant fell behind the United States in the first quarter of 2024, just as it did in the third and fourth quarters of 2023. This change in the hierarchy comes at a time of heightened economic and geopolitical tensions between Washington and Beijing. For Germany, it’s a turning point: China had been its leading trading partner continuously since 2015.
This trend owes much to the economic climate of recent months. Germany, in recession, has imported less than in previous years. Affected by the real estate crisis, Chinese demand has also contracted. The volume of trade with China came to €60 billion in the first quarter, compared with €63.2 billion with the US, which is enjoying sustained growth.
Some experts believe that this effect could continue. In a January study, Germany’s foreign trade agency, Germany Trade and Invest, estimated that, as a result of the Chinese real estate crisis and rising geopolitical risks with the US, the People’s Republic could lose its position as Germany’s leading trading partner for good.
Supplier diversification
This trend also reveals a lasting transformation in German production structures. Large industrial corporations, particularly automotive, increasingly tend to produce locally in order to serve the market with the help of local partners, bypassing exports. Medium-sized companies are also striving to diversify their suppliers and customers outside China, in order to protect themselves against risks.
A number of specialists are warning, however, of the impact that this trade war with China would have on the German economy in the event of retaliatory measures, given the importance of ties between the two countries. Automotive companies are in fact over 30% dependent on the Chinese market, according to a May study by the Center of Automotive Management. Destatis noted that China also remains by far the leading supplier to German companies, with 10.9% of total imports in the first quarter, well ahead of the Netherlands (7.6%) and the US (7%).
