China’s Status as Europe’s Top Trading Partner at Risk

A study published on Saturday suggests that China might lose its position as Germany’s top trading partner this year.

The organization “Trade and Invest”, which is owned by the German government, stated in a study published on Saturday, that “China’s dominant position in foreign trade with Germany is collapsing”, noting that both exports and imports experienced a significant decline last year.

The organization added that the slow trade between Germany and China is primarily attributed to the weak Chinese economy.

She added that the real estate crisis, geopolitical risks concerning the United States, and industrial investment weakness are all contributing factors.

German companies are also changing their strategies in the Chinese market. On one hand, they are trying to reduce their reliance on China when it comes to purchases. On the other hand, more and more companies are focusing on the domestic market, following the motto: “In China for China”.

The organization continued to state that these two factors weaken German-Chinese trade. Against this background, the total value of imports and exports with China contracted by 15 percent to reach 254 billion euros ($275.8 billion) last year, according to the organization’s expectations.

The study indicates that the situation is different with the American economy, which is growing strongly to an astonishing extent. Based on calculations, America lags behind China as a trade partner by only a billion to two billion euros.

The total volume of China’s international trade in goods and services reached 4.34 trillion yuan ($610.63 billion) in December 2023, an increase of 2 percent on an annual basis, according to official data released last Friday.

The National Foreign Exchange Regulation Authority stated that the volume of commodity exports reached 2.06 trillion yuan, while its imports amounted to 1.65 trillion yuan, resulting in a surplus of 409.9 billion yuan.

According to the agency, last month the total value of service exports amounted to 228 billion yuan, while imports reached 407.6 billion yuan, resulting in a trade deficit of 179.6 billion yuan.

According to the data, tourism was the largest contributor to the service trade with a trade volume of 171.1 billion yuan.

Big industrial companies in China achieved an increase in profits by 16.8 percent on an annual basis during December 2023, according to data released by the National Bureau of Statistics on Saturday.

(AP)