Chinese economic recovery benefits German export companies
In the midst of a gloomy economic landscape for Germany, the recovery of trade with China is proving to be a beacon of hope. According to Volker Treier, the foreign trade chief of the Association of German Chambers of Commerce and Industry (DIHK), the trade with China is preventing the German economy from sliding deeper into an export downturn.
In August 2020, China's industrial production rose by 5.6% compared to the previous year, and retail sales increased by 0.5%. These figures highlight the Chinese economy's recovery, which is benefiting German exporters significantly.
China is Germany's most important trading partner, with 96 billion euros of goods and services exported in 2019 and 110 billion euros imported. The Chinese market is crucial for many German premium manufacturers in the automotive sector, as exports in this sector are running well again, according to Volker Treier. German car manufacturers, such as VW, Daimler, and BMW, rely heavily on the Chinese market, selling 40%, 26%, and 24% of their vehicles there respectively.
The mood among German companies in China is cautiously optimistic, with many companies reporting a spectacular development in recent months that is even better than last year in some cases. However, there are still concerns among machinery and equipment manufacturers due to global travel restrictions caused by the coronavirus.
Another concern among German companies in China is the potential for China to become more independent of foreign supplies, including from Germany, due to the trade conflict with the US. In response, German companies are trying to find suppliers in China to mitigate this risk.
The chemical industry and pharmaceutical sector in Germany have also seen exports pick up again, as stated by Volker Treier. Despite the recent overall export decline to China, these sectors are traditionally core to German exports to China, with automotive being one of the largest export categories, followed by chemicals and pharmaceuticals.
For 2020, the DIHK expects a decline in China exports of two to three percent, which would be a significantly less dramatic outcome than for global exports, where the DIHK expects a drop of 12 to 13 percent. Looking ahead, the future forecast suggests cautious optimism but with near-term challenges. The modest growth in overall exports year-on-year (+0.4%) contrasts with the month-to-month dips. Given geopolitical factors, tariffs, and China's industrial policies, further fluctuations in automotive, chemical, and pharmaceutical exports are possible.
In summary, German exports to China in 2020, including automotive, chemical, and pharmaceutical sectors, are showing resilience amidst global economic challenges. However, the short-term outlook may face uncertainties tied to global trade dynamics and China's economic development.
[1] Funke Media Group Editions, Wednesday, August 2020 [2] DIHK Press Release, September 2020 [3] German Federal Statistical Office, Monthly Export Data, May 2025 [4] Bundesbank Monthly Report, June 2025
- In the chemical industry and pharmaceutical sector, Germany's exports have shown signs of recovery, mirroring traditional core categories of its exports to China.
- Within the finance industry, German companies are actively seeking suppliers in China to mitigate potential risks arising from China's potential shift towards more self-reliance in foreign supplies, especially amid the trade conflict with the US.
