German Chancellor Calls for Fair Competition in Trade with China

German Chancellor Calls for Fair Competition in Trade with China
Photo: KAY NIETFELD/AGENCE FRANCE-PRESSE/GETTY IMAGES 16.04.2024 429

The German Chancellor's call for "open and fair" competition came during a speech by Olaf Scholz at Tongji University in Shanghai.

German Chancellor Olaf Scholz in a visit to China on Monday said Chinese cars would be welcome on the market in Germany but warned against the use of unfair trade practices.

While Germany's economy has benefited from Chinese demand for products like cars to chemicals, ties have been strained with German companies arguing they face unjust market barriers in China.  

Bilateral annual trade volume between China and Germany surpassed of 253.1 billion euros (US$268 billion) in 2023.

While speaking at Tongji University in Shanghai Scholz noted that, when Japanese and South Korean cars were launched onto the market in Europe, there had been fears that they would completely conquer the market in a one-way shift toward Asia.

"Nonsense! There are Japanese cars now in Germany and German cars in Japan. And the same applies to China and Germany. At some point, there will also be Chinese cars in Germany and Europe. The only thing that must always be clear is that competition must be fair. In other words, that there is no dumping, that there is no overproduction, that copyrights are not infringed," 

Scholz said.

Olaf Scholz arrived on a three-day visit to China accompanied by executives from several major German companies, including Mercedes-Benz, BMW, Siemens, Zeiss, Bayer, and the chemical company BASF.

In Shanghai, Scholz was also due to visit an innovation center of German plastics manufacturer Covestro. Later on Monday, the chancellor was set to dine with the Party Secretary of Shanghai, Chen Jining.

The German chancellor is scheduled to meet with Chinese President Xi Jinping and Premier Li Keqiang in Beijing on Tuesday.

Scholz's visit comes while the The European Commission (EC) is investigating China's subsidies for the production of electric cars, as the global market is "flooded" with cheap Chinese cars of this type. European Union ponders punitive tariffs to protect the bloc's manufacturers from more affordable imported Chinese electric cars.

"The Americans are now sealing off their market, as are Brazil, Mexico and Turkey. The EU cannot be the only market that remains open to Chinese overproduction,"

Commission President Ursula von der Leyen said.

According to a survey conducted by the German Chamber of Commerce in China, a two-thirds majority of German companies surveyed face unfair competition from local manufacturers. They attribute this to the fact that private Chinese companies often enjoy significant state subsidies, while foreign companies in China have to struggle with the problem of limited market access. The lower cost efficiency and speed of innovation compared to Chinese competitors also have a negative impact.

Sources: DPA, Deutsche Welle

China 

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