General

On November 4, German Prime Minister Schultz was invited to pay an official visit to China. This is Schultz's first visit to China since he took office. It is also the first time that German Prime Minister came to China after more than three years. This trip will also include a business delegation in various fields composed of 12 representatives of German companies.

On October 11, the 50th anniversary of the establishment of diplomatic ties between China and Germany. China Germany economic and trade cooperation has entered a stage of rapid development. By 2021, China has become Germany's largest trading partner for six consecutive years. In recent decades, China's importance to Germany's foreign trade has risen sharply. China has been Germany's most important foreign trade partner since 2016, and Germany's largest source of imports since 2015.

How can China Germany trade and investment relations enter the fast lane? Which commodities connect the trade between China and Germany? What areas of trade do the two countries continue to deepen?

1. China is Germany's largest source of imports

In 2021, the total import and export volume of China Germany international trade will be 245.3 billion US dollars, accounting for 19.9% of the total import and export volume of China and Europe.

As for Scholtz's visit to China, Martin Wansleben, Director General of the German Chamber of Commerce and Industry, said in an interview with the media that Scholtz's visit to China was correct and that Germany would lose its prosperity if it left China.

In 2021, nearly one fifth of China's total international trade imports and exports in Europe will come from Germany. Data shows that in recent years, China Germany trade exchanges have been deepening, and the total bilateral trade has increased significantly. Since 2012, Germany has been China's largest trading partner in Europe. In 2021, the total import and export volume between China and Germany reached a new high of 245.3 billion US dollars, accounting for 19.9% of the total import and export volume between China and Europe.

China has become Germany's most important trading partner for six consecutive years. In 2021, the total volume of international trade imports and exports between China and Germany will increase by 15.1% compared with 2020. In Germany's import trade, China's importance is also rising steadily. The data shows that in 2021, China will be the largest import source of Germany, with the amount of imported goods reaching 142.4 billion euros, up 20.8% year on year. At the same time, China is also Germany's second largest exporter, with exports of goods reaching 103.7 billion euros, second only to the United States.

According to the data released by the Federal Statistical Office on April 4, the throughput of German shipping containers in 2021 will be 14.8 million TEUs, 5.9% higher than that in 2020, but 1.5% lower than that in 2019. China is Germany's largest container shipping trading partner. The total volume of container transactions between the two countries is 3.1 million TEUs, accounting for 20.7% of Germany's total container throughput.

2. "Three major pieces" of Sino German trade

Which commodities connect the trade between China and Germany? According to the data, mechanical equipment, electrical equipment and optical instruments have become the main commodities in Sino German trade.

In 2021, Germany will export 26.586 billion euros of auto products to China, making it the largest export to China. China's electrical equipment is welcomed by the German market. In 2021, a total of 43.27 billion euros worth of electrical equipment will enter Germany.

3. The two-way investment stock of China and Germany exceeded 55 billion dollars

In addition to the international trade of goods, two-way investment also brings more opportunities for in-depth cooperation between the two countries. According to the data of the Ministry of Commerce, the two-way investment stock of China and Germany has exceeded 55 billion US dollars, constantly deepening economic and trade cooperation, and bringing about favorable development for enterprises and industrial chains of the two countries.

Data shows that by the end of 2020, Germany has invested 36.41 billion US dollars in China, which is the largest amount of investment in China among EU members. From 2016 to 2021, Germany will always be among the top 15 countries or regions in China's investment sources. In 2020, Germany will set up 466 new enterprises in China, with a total of 11300 enterprises.

Since this year, Germany's investment in China has continued to grow. According to the latest data of the Ministry of Commerce, in the first eight months of 2022, the actual amount of foreign capital used nationwide was 138.41 billion US dollars, of which German investment in China increased by 30.3%.

In recent years, Chinese enterprises have also continued to increase their investment in Germany. China is one of the three major sources of investment in Germany. According to the report of the German Federal Foreign Trade and Investment Agency, in 2021, China will invest 149 projects in Germany, ranking third in the number of investment source countries for two consecutive years, involving machinery manufacturing and equipment, automobile, consumer goods and food, communication technology and software and other fields.

In 2020, China will invest in 170 projects in Germany, becoming the third largest country in terms of investment in Germany. The flow of direct investment increased to 1.83 billion US dollars. In 2021, although the number of Chinese investment projects has declined, the number of German investment projects still ranks third. According to the analysis of the German Federal Foreign Trade and Investment Agency, it may be that the business travel between Germany and Asia decreased significantly during the epidemic period, which led to a decrease in the amount of investment.

The economies of China and Germany are highly complementary, and the German machinery manufacturing and equipment industry, automobile industry, consumer goods and food industry are mainly attracting Chinese investors. Germany is the largest exporter of machinery and equipment in the world, and also a powerful automobile manufacturing country in the world. It has a relatively complete industrial chain, which just corresponds to China's strong industry. The data shows that in 2021, 16% of Chinese enterprises' investment projects will be in the machinery manufacturing and equipment industry, with the focus on the automobile industry and the consumer goods and food industry accounting for 13% respectively.

4. German auto enterprises increase their layout in China

At present, there are more than 11300 German enterprises in China, mainly in the fields of chemical industry, automobile, finance, electronics, electronics, pharmacy and retail. Many enterprises bring new technologies and resources to China, and cooperate with local enterprises in depth to achieve development. German cars are the most familiar German products for Chinese consumers. Since entering the Chinese market for nearly 40 years, they have improved the quality of life of Chinese consumers and promoted the development of China's automobile industry.

In 1984, China and Germany signed a joint venture contract. Volkswagen became the first car joint venture in China's reform and opening up, opening the prelude to cooperation between China and German car enterprises. Subsequently, Volkswagen, Daimler and BMW continuously increased their layout in China, opened R&D centers and increased investment in production plants.

Since 2010, German car enterprises and Chinese international trade enterprises have been deeply integrated in the field of new energy vehicles, and industrial cooperation has been derived into upstream industries. In 2020, Daimler will invest 904.5 million yuan in China's power battery enterprise Funeng Technology to develop and industrialize new and high cell technologies.