The influential Federation of German Industries (BDI) stressed concern over challenges the state-driven economic model in China presents to the EU and Germany. In a paper presented on Thursday, the BDI stressed that while German firms need China, Beijing must be willing to further open its domestic market. BDI President Dieter Kempf said: “Beijing should in its own interests further open its domestic market and properly implement its long-announced economic reforms.” He added: “No one should hide the challenges that China presents the EU and Germany.”
The BDI details 54 demands to Berlin and Brussels in its paper, including calling on the EU to create a stronger economic framework for its own internal market.
This includes stricter EU subsidy rules where non-European companies should not be able to sell their products in the bloc without restrictions.
The paper read: “For the EU, it is more important than ever not only to spell out the importance of its own system and values internally but also to offensively represent them externally.”
The BDI paper – entitled ‘Partner and Systemic Competitor – How to cope with China’s state-driven economic model?’ – stresses that Germany strengthen its trade relations with foreign states.
It state: “Nonetheless, it is generally sensible for the German industry to maintain diversified trade relations and make investment decisions.
“Too much dependence on a single market always involves political and economic risks that must be minimised.”
Germany’s DIHK Chambers of Industry and Commerce, which estimates that some 900,000 jobs in Germany depend on exports to China, cautioned against a harder stance on China.
DIHK economist Volker Treier said: “The BDI position paper on China brings another tone into the debate.
“But we always have to keep in mind that China is our most important trading partner. So every word should be weighed carefully.”
The Economy Ministry welcomed the BDI report to make German and European companies more competitive, but it also said that any differences with China must be solved through dialogue.
An economy ministry spokeswoman said: “China and Germany have very close and advantageous trade relations that allow us to address unequal rules of competition for our companies in the respective markets in a continuous dialogue process.
“At the same time, we are increasingly looking to better protect and strengthen sensitive German and European business sectors from state-run strategic overseas acquisitions.”
Outside of the EU, China remains the most important trading partner for Germany with trade volume reaching €187billion (£169billion) in 2017.
German exports to China totalled up to €86billion (£77billion) while imports from China were worth £101billion (£90billion), according to The Telegraph.
Last month, BDI managing director Joachim Lang told German broadcaster Deutschlandfunk that a hard Brexit was the worst case scenario for Britain leaving the EU.
He claimed many companies are still cautious despite having conscientiously made preparations for Britain exiting the bloc with no deal.