How is the Swabian-Chinese relationship developing?

icon image. The entrance portal to the Forbidden City in the Chinese capital Beijing. Photo: Torsten Weidemann / pixelio.de

China has recently made a name for itself by buying parts of the Port of Hamburg. But how interconnected is the relationship between the regional economy and China really? This is what customs and foreign trade law expert Axel Sir assesses.

At the Swabian Chamber of Industry and Commerce, Axel Sir is head of the department for customs and foreign trade law. Regarding the current relationship between the People’s Republic of China and the Swabian economy, he first takes a look at the past twenty years: “Since the People’s Republic of China became a member of the World Trade Organization in 2001, China’s share of global trade in goods has steadily increased. China’s rise in international trade is also reflected in the economic relations with Bavaria. Over 500 companies from Bavaria-Swabia alone are active there. After the EU, China is Bavaria’s largest economic partner.”

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These sectors are particularly closely linked to China

“China is particularly important as a sales market for Bavarian products and as a supplier of upstream services. Above all, the automotive, textile, mechanical engineering and pharmaceutical industries purchase a wide range of services from China,” says Sir. He also adds: “The imported raw materials from China, which is used as an input for key technologies such as electric motors, wind turbines and digital technologies, is also particularly important for the Bavarian economy. Also with rare earths, there is a dominance of China as an exporter.”

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Is China the only player for Swabia?

Axel Sir cannot answer this question with an unequivocal yes. Because the relationship with Chinese products is divided: “We know from studies and our consultations that imports from China are currently being put to the test by many medium-sized companies. Manufacturing and trading companies want to reduce the number of Chinese imports. The goal of most companies is to diversify their supply chains.” Nevertheless, he still admits that China has an important position in the trade network of regional companies, explaining: “Although many things are difficult in economic relations, companies do not want this market gives up completely. Given the current intensive economic ties, an abrupt end would result in enormous damage.

It is therefore important that we agree clear trade and investment rules with China, ideally through the World Trade Organization (WTO). At the same time, Germany should intensify trade relations with other countries in the EU in order to diversify supply chains, especially for critical raw materials and imports for key technologies.”

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