Export surplus world champion Germany exported 95 billion euros worth of goods to the People’s Republic of China in 2019. According to the latest reports of the Research Group Macroeconomic Analyses and Economic Affairs, ‘Institute of the German Economy’, the Chinese economy is already looking forward with cautious optimism.
In its July article on economic development in China, this quotes the IMF’s forecast stake that China’s growth for 2020 will be 1 percent higher; after an increase of 3.2% in the second quarter (compared to the previous year), newer estimates suggest year-round growth of two to three percent.
In addition, recent calculations assume that the Chinese economy will gain momentum and that growth of 9.21% is expected for the following year. This figure would be above the average of the growth trend of the past five years before the outbreak of the Corona pandemic.
The current corona crisis has “accelerated a process that has been going on for several decades”. The continuous growth of the Chinese economy, based on the Sino-Socialist plan parameters, continues already after the globally noticeable “Corona-Delle” in international comparison and confirms its attractive role as an export market.
China trade balance
In 2019, China’s trade surplus was about .421.9 billion U.S. dollars. The statistics show china’s trade balance from 2009 to 2019. The trade balance is the value of exports of goods, minus the value of imports of goods.
The Handelsblatt can’t help but admit that no country has benefited as much from China’s rise as an economic power as Germany. China is now ranked third in Germany, after the US and France. Relations between Germany and China are now more intense than ever. The crisis is accelerating a development that has been foreseen for years that China will replace the US as the most important buyer of German exports this year.
As a result of the Corona crisis, the market situation in Germany’s most important export destination countries remains in crisis management mode. According to the Federal Statistical Office of July 9, German exports to China fell by 12.3 percent to 7.2 billion euros in May. Exports to the United States, on the other hand, fell by 36.5 percent to 6.5 billion euros.
The export gap between China and Germany’s largest export sales markets narrowed “significantly” in the first five months of 2020. China’s economy is closing in.
With exports worth 95.97 billion euros, China was Germany’s third most important customer in 2019 (after the United States and France). Imports increased by 2.7 percent year-on-year and will continue to grow according to the experts' expectations.
The crisis-ridden German car manufacturers and mechanical engineers are also actively ramping up their production locally in China in order to be able to offset and expand their profit losses in other countries in the medium term in order to be able to offset and expand their profit losses in other countries in the medium term in order to be able to offset and expand their profit losses in other countries in the medium term in order to be able to offset and expand their profit losses in other countries in the medium term in order to be able to offset and expand their profit losses in other countries in the medium term in order to be able to offset and expand their profit losses in other countries in the medium term in view of the high market demand for automobiles – including the quota for electric cars. New car registrations in June this year were already higher than in the previous year. (IW koeln, ibid.) For the car groups BMW, Daimler and VW as well as the semiconductor manufacturer Infineon and the sports goods manufacturer Adidas, China ranks ahead of the home market Of Germany as the largest sales market.
Only a very few large corporations still afford to be inactive in China in 2020. With a 15 percent share of sales, almost 200 billion euros, China is the second most important foreign market after the USA for the 30 largest German listed companies, according to calculations by Handelsblatt. The Dax Groups have almost 700 subsidiaries in China. Data from China’s General Customs Administration shows the country’s exports rose 7.2 percent last month. The figure is well above analysts' expectations.
China’s manufacturing sector expanded again last month at its fastest pace since 2011, thanks to a sharp rise in both production and new orders.
The current Caixin Purchasing Managers' Index published by Markit Economics is considered an early indicator of the economic health of China’s manufacturing sector. Any value above 50 signals expansion. The current PMI index is 53.1, with an upward trend.
With the expansion of economic globalization, the Chinese economy has become well integrated into the global economy, and Chinese companies' involvement in global business has increased. New initiatives such as the Belt and Road Initiative (BRI), the China International Import Expo (CIIE), which was important up to the Corona crisis, and the conversion project of the Hainan Special Economic Zone in the South China Sea into a free trade port demonstrate China’s integrated global participation in world trade.
Its importance as the primary export destination for the crisis-hit exporting nation Germany, which is to be expected in the future, is calling on the political elite and representatives of different capital factions. As an integral part of the Western world of values, it is the intention of the Federal Government to reorient the political-economic framework conditions and its own political claims to power in dealing with the economic partner China and to demand new concessions from the partner.
Reorienting means that in any case there are valid international and bilaterally agreed contractual relations according to internationally valid agreements, on the basis of which relations have developed to this day. After the usual capitalist expansionary compulsion, Germany wants to impose a new set of rules on economic relations on the emerging country of China. The aim is to facilitate market access and improve capital exploitation conditions for German companies operating transnationally.
At the same time, the aim is to demonstrate to the us and the EU states that Germany maintains its loyalty to the alliance, but is nevertheless capable of asserting its claim to economic power in a more aggressive tone.
The media commentary on the visit of Chinese Foreign Minister Wang Yi to Germany, among others, speaks of a necessary “economic policy course correction” towards the economic partner China. The Federal Government is relying on the well-known rule-making and teaching manner, according to which Western system values are also the criterion outside the Western Hemisphere, how a sovereign state has to deal with national affairs, national-ethnic conflicts and protest movements, and how to set limits to the offers of forward-looking technology cooperation (Huawei).