German Exports Plunge 24%
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German media occasionally clamors for decoupling, but the recent stagnation of the German economy indicates that the counterproductive effects of decoupling have already emerged.
The German economy has not grown for two consecutive quarters, with a quarterly decline of 0.3% in the first quarter and a growth rate of 0% in the second quarter.
Where lies the problem?
Ironically, when the economy encounters problems, German media incessantly complains about the sluggish demand from China.
However, in reality, China's demand has been growing robustly; it's not that we are not buying, but some countries are not selling, which is the so-called phenomenon of decoupling and supply chain disruption.
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The German government, including Chancellor Scholz, has been ambiguous about decoupling and supply chain disruption, bringing immense uncertainty to Germany's trade.
Sometimes they express the importance of the Chinese market, and at other times they adopt protectionist policies towards China, making it difficult for German companies to predict the future trade environment.
This instability directly leads to a reduction in German exports, with companies facing a sharp decline in orders and a loss of market share.In response to this, some more sober German media have warned the German government: China has already launched a campaign against decoupling.
Now, the rapid development of China's automobile manufacturing industry has led to a significant decline in German automobile and related product exports to China, with a drop of up to 23.9%.
For a long time, the German automobile manufacturing industry has been one of the pillars of the German economy and an important pillar of German exports, once supporting half of Germany's total export volume.
Now, China has made rapid progress in automobile manufacturing, and China has even surpassed Japan to become the world's largest automobile exporter.
Facts have proven that the development of China's automobile industry has not only met domestic market demand but has also begun to export its automobile products to the global market, making China no longer heavily dependent on German imports as in the past. On the contrary, China has begun to play a more important role on the global stage.
After decoupling, it has become difficult for Germany to reconnect.
China's competitiveness in automobile manufacturing is continuously increasing. Whether it is technology, quality, or price, it is slightly better.
Chinese consumers' recognition of local automobile brands is also increasing, further leading to a gradual decrease in demand for German automobiles in China, causing a huge impact on the German economy.
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For German companies, the impact of declining exports is significant.This year, only 6.2% of Germany's exports were directed towards China, and China has slipped from being Germany's largest export market to the fourth position. This change has sparked complaints from the German media.
At the same time, many German companies have realized that cooperation with China is the key to future development.
The German automotive giant Volkswagen recently announced a partnership with the Chinese new energy vehicle company Xiaopeng Motors to jointly develop new energy vehicle technology. This collaboration will not only provide German companies with a larger market share but also leverage the rapid development of the Chinese market to promote technological innovation and product upgrades.
Additionally, German Audi has expressed its intention to purchase a complete electric vehicle platform from China, a move that will further deepen cooperation between Germany and China in the automotive sector.
The Chinese market is not just an export destination for German companies; it is also a partner and an innovation engine. The potential for consumer upgrades and technological innovation in China offers vast development opportunities for German companies.
Some countries mistakenly believe that China needs to rely on their goods or technology, thus proposing decoupling. However, the reality now shows that it is these countries that need our technology and our market.
Countries that ultimately wish to decouple may find themselves decoupled in the end.
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