Illustration: Chen Xia/GT

While the German economy became "increasingly dependent" on China in the first half of this year, there have been more frequent discussions among German media outlets and think tanks as to reducing German economic reliance on China. This unsettling trend that diverges from German's economic needs and interests will increase the risk of serious consequences for the German economy.

During the first half of 2022, German investment in China amounted to around 10 billion euros ($10 billion), far exceeding the previous peak half-year value recorded since the turn of the millennium, while German imports of Chinese goods in value terms surged by 45.7 percent year-on-year, Reuters reported on Friday, citing a study by the German Economic Institute (IW).

Yet, Juergen Matthes, who authored the study, called on German businesses to curb their "dependency" on China, warning that any potential Western sanctions on China over the Taiwan question would "threaten particularly exposed companies with bankruptcy," according to Reuters.

Some Western politicians or scholars have been hyping up topics which link the reduction of "dependence" on China to the situation across the Taiwan Straits, but those people should be clear that Taiwan is an inalienable part of China, there is no need for anyone to play with fire on the Taiwan question at the risk of damaging its own interests. The overemphasis on the so-called "dependence" of normal trade with China is a reflection of German self-interest giving way to narrow geopolitical bias.

If anything, the real danger to the German interests lies in some politicians motivated by personal political interests trying to use ideological bias and geopolitical calculations to influence government and economic decision-making, rather than the close economic ties that the business communities in the two countries have developed over the years.

Why is Germany becoming more "dependent" on China? The fundamental reason is that it is entirely a market choice. China not only offers a massive market for German products, but also the manufacturing industry German businesses need.

Some statistics showed one out of every three cars produced by German carmakers is sold in China, where they also operate a substantial network of factories. BMW opened a multi-billion-dollar factory extension in China this year, while Audi is building its first electric vehicle plant in the country, according to media reports. 

China has the advantages in high-quality manufacturing, guaranteed supply-chain support, and a large number of skilled workers. Germany, on the other hand, has strength in advanced technologies and high level of industrialization. The highly complementary China-Germany cooperation is a result of the globalization era.

If anyone tries to cut the economic and trade exchanges between China and Germany, then the consequences for the German economy will be serious. Not only will German companies lose market share in China, but the country's supply chain will also be disrupted, leading to more turmoil that the German economy cannot afford at the current juncture.

Currently, Germany is facing the challenge of reshaping its energy structure in the short term. Germany's central bank chief recently warned that the recent surge in energy prices was likely to drive German inflation above 10 percent this autumn and keep it elevated next year, the Financial Times reported. At this time, if some politicians want to weaken the country's economic ties with China due to political reasons, it will take the toll on the economy even faster.