GERMAN Chancellor Olaf Scholz will pay an official visit to China on Friday. China and Germany, both countries powerful and influential, are major trading partners. A high degree of economic complementarity has presented huge potential for cooperation, which is not only beneficial for the two countries, but also significant for the prosperity of their regions and beyond.

Booming trade

The China-Europe freight train service offers a snapshot of how trade between China and Germany is flourishing.

On Sept. 9, the 10,000th fully loaded China-Europe freight train in 2022 arrived at Hamburg, a port city in northern Germany, from Xi’an International Port, Northwest China.

This train is “an important milestone in China’s cooperation with Germany and Europe,” said Wang Wei, deputy consul general of the People’s Republic of China in Hamburg.

“The high-capacity connections of the China-Europe goods trains have greatly helped foreign trade in reducing costs and increasing efficiency, and effectively promoted economic development along the route,” Wang said.

China remains the top trading partner of Germany’s largest port Hamburg, said Port of Hamburg Marketing (HHM), adding that in addition to sea transport, containers are being transported in increasing numbers by rail between Chinese cities and Hamburg.

“For time-sensitive freight, the container train services provide an attractive alternative for transport” between Hamburg and Chinese cities, said Axel Mattern, HHM’s chief executive officer (CEO).

With 82 routes, the trains reach 200 cities in 24 European countries, forming a transport network covering whole Europe. The trains transport more than 50,000 types of goods across 53 categories, such as automobiles and parts, clothing and accessories, and grain and timber.

Germany is one of China’s most important trading partners in Europe, and China has been Germany’s top trade partner for six consecutive years. The trade volume between them has mushroomed to more than US$250 billion in 2021 from less than US$300 million when diplomatic relations were first built between the two countries half a century ago.

Market opportunities

Immense potential remains for China and Germany to enrich their relations and deepen their mutually beneficial cooperation regarding climate change, macroeconomic policy, environmental protection, services trade, AI and digitalization.

China has been speeding up efforts to open up, which means broader market opportunities for countries like Germany. In the meantime, Germany, as a leader in technological innovation, continues to exert a pull on Chinese enterprises.

In the first nine months of this year, foreign direct investment into the Chinese mainland expanded 15.6% year on year to 1.00376 trillion yuan. In U.S. dollar terms, the inflow went up 18.9% year on year to US$155.3 billion, data from China’s Ministry of Commerce showed. Among all sources, investment from Germany showed the strongest growth, jumping by 114.3%, according to the ministry.

In September, German chemicals giant BASF inaugurated the first plant of its new Verbund site in Zhanjiang City, south China’s Guangdong Province.

The company said it will produce 60,000 metric tons of engineering plastics annually, to be used in particular by China’s car and electronics industries.

Between January and September this year, BASF’s sales in China rose 5.8% year-on-year to 9.2 billion euros (US$9.2 billion).

“We benefit from China’s policies of widening market access,” BASF CEO Martin Brudermueller said at the inauguration ceremony in Zhanjiang. “Overall, we came to the conclusion that it is advantageous to expand our involvement in China.”

Germany, a powerhouse in the automobile industry, has been attracting an increasing number of Chinese automakers.

Ferdinand Dudenhoeffer, director of the CAR Center Automotive Research Duisburg, said that key battery manufacturers in China are now building battery cell factories with large investments in Germany.

China’s carmakers like NIO and BYD have brought their products and services to Europe, Dudenhoeffer said.

“Both China and Germany are leaders in the auto industry and have their unique advantages in technology and market,” Xiong Meng, an official of the China Federation of Industrial Economics, said at the Sino-German Forum on the Development of the NEV Industry in September.

“Cooperation in the automobile industry between the two countries has been carried out in multiple fields and achieved remarkable results,” said Xiong.

Win-win cooperation

With the world economy in the doldrums, staying open, engaged in cooperation and fostering economic and trade ties are good not only for the two countries, but also for the world.

As Germany is a pivotal country in the EU, the continent’s prosperity is closely hinged to Germany, and therefore deepening China-Germany and China-EU cooperation will serve the interests of both sides and beyond.

Scholz recently said that he supports globalization, adding that decoupling is the “wrong answer” and that Germany must do business with the rest of the world, including China.

Executive Vice-President of the European Commission Valdis Dombrovskis, who is in charge of economic affairs, also reportedly said he believed that decoupling from China is not an option for EU companies, and that “the EU should continue engaging with China with pragmatism.”

“We commend these remarks from the European leaders,” Chinese Foreign Ministry spokesperson Mao Ning told a news briefing, adding that China also supports globalization and opposes decoupling.

Last year, China-EU trade volume exceeded US$800 billion for the first time and two-way investment went beyond US$270 billion in cumulative terms, Mao said.

Noting that China-Europe cooperation is rooted in extensive common interests and similar strategic needs, Mao said that such cooperation enjoys great resilience and potential.

“China is ready to work with Europe to jointly work for greater progress in bilateral cooperation in various areas and deliver more benefits to the two peoples,” Mao said.(Xinhua)