'Better off thanks to China': German companies double down on resurgent giant

[snoop1130]

'Better off thanks to China': German companies double down on resurgent giant

By Michael Nienaber

 

FILE PHOTO: An employee works on an industrial robot at HAHN Automation company in Rheinboellen, Germany November 11, 2020. REUTERS/Ralph Orlowski

 

BERLIN (Reuters) - German industrial robot-maker Hahn Automation plans to invest millions of euros in new factories in China over the next three years, keen to capitalise on an economy that's rebounding more rapidly than others from the COVID-19 crisis.

 

"If we want to grow with the Chinese market, we have to manufacture on the ground," Chief Executive Frank Konrad said of the investment drive, intended to skirt Chinese export hurdles in what Beijing views as a strategic sector.

 

"Our goal is to make up to 25% of our sales in China by 2025," he told Reuters, up from roughly 10% now.

 

But while the Chinese recovery may be good news for companies like Hahn, it is complicating efforts by Chancellor Angela Merkel's government to diversify trade relations and become less dependent on Asia's rising superpower.

 

Despite Berlin's concerns, German industry is deepening ties with China, which battled the pandemic with stricter measures than other countries, moved out of a first lockdown earlier and saw demand rebound more quickly.

 

Olaf Kiesewetter, CEO of car sensor supplier UST in Thuringia in eastern Germany, shares the same ambition of making 25% of sales in China.

 

"We clearly notice that China has come out of the crisis with force," he told Reuters, adding that China had already become UST's biggest export market outside the European Union a couple of years ago, accounting for 15% of sales.

 

"Without China, our business in the third quarter wouldn't have been so good. So there is no doubt that we're better off thanks to China."

 

Such shifts towards greater reliance on the Chinese market run counter to Berlin's trade diversification drive, which can be traced back to the Chinese takeover of Bavarian robotics firm Kuka in 2016 - a step described by German officials as a wake-up call to start viewing China as a serious competitor.

 

CHINA 'EMERGING STRONGER'

 

Yet the same realities facing Konrad and Kiesewetter this year are playing out more widely, and the two countries have become more intertwined in some ways.

 

In terms of top destinations for German exports by value, China overtook France in the first nine months of 2020 and came close to the United States, data from the Federal Statistics Office compiled for Reuters showed.

 

A senior official told Reuters that given the latest trade and growth trends, China was likely to overtake the United States by the end of the year, to become number one.

 

China's share of overall German exports rose to nearly 8% in the Jan-Sept period, from roughly 7% a year earlier, according to the data. China is also Germany's top supplier, with its share of German imports rising to more than 11% from below 10%.

 

In the near term, at least, China is looking stronger than many countries in the West.

 

Germany, Europe's economic powerhouse, is reeling under a second wave of COVID-19 and its economy is forecast to shrink by a record 6% this year, according to the International Monetary Fund. China is expected to be the only major economy to report growth this year, with a projected expansion rate of 1.9%.

 

Germany is expected to rebound in 2021, yet its projected growth of 4.2% still lags the IMF's global forecast of 5.2% and is around half of China's projected 8.2%.

 

"We're observing that China is emerging stronger from the crisis, at least for now," said Stefan Mair, one of the masterminds behind a strategy paper published by the BDI industry association last year which encouraged Berlin and Brussels to toughen their approach towards Beijing.

 

"China has become even more important for Germany in economic terms since the start of the year," said Mair, who has headed the SWP political think-tank since October.

 

MASKS AND MEDICAL GEAR

 

The disruptions caused by the pandemic are exposing Europe's dependencies in certain areas.

 

A new survey from the Berlin-based Mercator Institute for China Studies (MERICS), shared exclusively with Reuters, found more than 100 product categories in which the EU has a critical strategic dependence on imports from China.

 

"Europe critically depends on Chinese imports for the pharmaceutical, chemical and electronics sectors, mostly on components produced in technologically less sophisticated areas of the value chain," MERICS researcher Max Zenglein said.

 

In September, Economy Minister Peter Altmaier told Reuters that Germany must become less dependent on Asian suppliers in areas such as medical precursors and that Europe as a whole should try to diversify its trade relations.

 

But that's easier said than done.

 

In an example of the complexities, efforts by the German government to support the local production of medical face masks following the first wave of the pandemic had a mixed success.

 

Peter Haas from the Suedwesttextil business association said Berlin's push didn't lead to a domestic and sustainable market for medical masks because the plan focused on funding investment and did not include purchase guarantees.

 

"After the initial panic, the public sector in particular turned its back on local producers again and now buys protection masks at the lowest price - and that's often from China."

 

An economy ministry spokesman said competition rules of the EU single market did not allow purchase guarantees. But he added Berlin was nonetheless confident of reaching its goal of supporting the local production of seven billion masks this year.

 

DEPENDENCE 'CUTS BOTH WAYS'

 

But while Chinese demand might have helped many companies weather the pandemic, some still face the kind of obstacles that German officials complain give China an unfair advantage, with Beijing's hybrid model of mixing a state-controlled economy with private-sector activity.

 

Hahn Automation, for example, is facing export hurdles for its "Made in Germany" machines as Beijing has singled out industrial robots as one of the areas of special interest in its industrial strategy titled "Made in China 2025".

 

"China is cordoning itself off without mercy," said CEO Konrad. "It wants to bring a large part of added value in the area of automation and industrial robots into its own country."

 

This leaves Hahn Automation, which is based in the western German town of Rheinboellen and makes machines for the auto and healthcare sectors, little choice but to shift parts of its production to China, Konrad added.

 

"It's impossible to ignore China because its market and growth opportunities are simply too big," said Mair of SWP. "But most German firms are well aware they are not doing themselves a favour if they put all their eggs in one basket."

 

The Chinese foreign and commerce ministries did not respond to Reuters requests for comment.

 

Beijing said in June, in response to EU calls for it to open up its economy, that progress had been made, and patience was needed. But it has also rejected any interference in Chinese affairs, saying it does not breach global trade rules.

 

Nonetheless, to broaden production options in Asia, German firms are eyeing alternatives such as Indonesia or Vietnam, said Friedolin Strack, head of the BDI's foreign trade department.

 

But he cautioned: "It will probably take three to five years before we can tell how successful German companies have been in their efforts to become less dependent on China."

 

Zenglein, of MERICS, argues that Europe should adopt a clear-eyed assessment of its vulnerabilities and strengths to balance the different spheres of cooperation and competition.

 

"Economic dependence also cuts both ways: China has much to lose from deteriorating relations with the EU, which is one of the largest foreign investors, and job-creators, in the country, as well as an important market and source of know-how."

 

-- © Copyright Reuters 2020-11-18

 

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[Mavideol]

12 minutes ago, snoop1130 said:

"It's impossible to ignore China because its market and growth opportunities are simply too big," said Mair of SWP. "But most German firms are well aware they are not doing themselves a favour if they put all their eggs in one basket."

don't come back crying out the blues when you realize they stole/steal your technology and kick you out

[Benmart]

Some are willing to dance with the devil if the payment is large enough. In the future, perhaps the same technology will be used to step on the German dancer's toes.

Edited November 19, 2020 by Benmart
Reword

[Deli]

The German chancellor originates from a commie country...

[4737 Carlin]

20 hours ago, snoop1130 said:

China is looking stronger than many countries in the West.

 

China unleashes a global virus on the world then seems to benefit from destroying the economies of its competitors. I'm sure its just a coincidence and they hadn't thought about any of that when they allowed their people to fly around the world spreading it far and wide.

Edited November 19, 2020 by 4737 Carlin

[Traubert]

35 minutes ago, Deli said:

The German chancellor originates from a commie country...

Yes, damn Commies, all the same.

 

((c) Mike Pompeo)

[placeholder]

As the article points out, the Chinese are in effect stealing German jobs by forcing this company to set up plants in China.

[ShindenGo]

Anyone who blames China is a virulent racist against Asians and is immune to science-based facts. Although the disease did originate in China, China has been speedy and transparent in the highly contagious and highly deadly disease. Even the WHO has praised Chinas efforts in stopping the virus! We all should look to China for real leadership  and inspiration on how to govern a country

Edited November 19, 2020 by ShindenGo

[johng]

14 minutes ago, ShindenGo said:

We all should look to China for real leadership  and inspiration on how to govern a country

LOL  !!!! 

[snowgard]

1 hour ago, 4737 Carlin said:

 

China unleashes a global virus on the world then seems to benefit from destroying the economies of its competitors. 

What a nonsens!!! The reality is that if all countries reacted like china done it, the world never had a so bad epedemie as now.

And the latest news shows that the corona virus was already in summer 2019 in Italy. So it can be that it isn't a chinese virus but a italian!!!

https://www.google.com/search?q=corona+virus+italy+summer+2019

[simon43]

42 minutes ago, ShindenGo said:

Anyone who blames China is a virulent racist against Asians and is immune to science-based facts. Although the disease did originate in China, China has been speedy and transparent in the highly contagious and highly deadly disease. Even the WHO has praised Chinas efforts in stopping the virus! We all should look to China for real leadership  and inspiration on how to govern a country

Please stop!!!! ????  I have just wet my knickers 'cos I laughed so much!

[Traubert]

1 hour ago, placeholder said:

As the article points out, the Chinese are in effect stealing German jobs by forcing this company to set up plants in China.

Only if they want to trade with China and be competitive. Thats market forces.

[Knocker33]

1 hour ago, ShindenGo said:

Anyone who blames China is a virulent racist against Asians and is immune to science-based facts. Although the disease did originate in China, China has been speedy and transparent in the highly contagious and highly deadly disease. Even the WHO has praised Chinas efforts in stopping the virus! We all should look to China for real leadership  and inspiration on how to govern a country

Not racist against all Asians. Just the Chinese

[soalbundy]

3 hours ago, car720 said:

Greed at its finest.  To hell with what is right or wrong.

Pragmatism pure and simple. America slams tariffs on some EU goods and Trump is trying to dictate to Germany where they buy their gas from so they are no less of a threat to stable trading.

 

As the report says, Europe is a very large employer and investor in China so the EU isn't without retaliatory power.

 

America under Trump has been a rollercoaster ride, he has lost the tariff war with China, has lost influence in Asia and now the stable genius is losing influence in Europe, slowly but surely America will stand naked without a friend in the world. Biden may change things, or want to, but if the Dems don't have the senate it could take years to undo the damage Trump has caused.

[sawadee1947]

4 hours ago, Deli said:

The German chancellor originates from a commie country...

No, she was born in HAMBURG ????

[rabas]

2 hours ago, snowgard said:

What a nonsens!!! The reality is that if all countries reacted like china done it, the world never had a so bad epedemie as now.

 

The rest of the world doesn't have enough welding equipment for a Wuhan lockdown.

 

 

2 hours ago, snowgard said:

And the latest news shows that the corona virus was already in summer 2019 in Italy. So it can be that it isn't a chinese virus but a italian!!!

You didn't read the paper!  here.  Though it may have circulated in Italy as early as September, they suggest it was international, not just Italy, and referecne evidence of many early cases in Wuhan (in China). They say:

 

"A second study by Harvard University showed a relevant increase of hospital traffic in the Wuhan region, evaluated by satellite imagery, and COVID-19 symptoms–related queries in search engines, since autumn 2019.¹¹ "

 

A recent massive study of SARS-2 genome evolution traces it back to the mother bug, which they say was several weeks earlier than first reports, likely in China.

 

What does all this mean?  China's CCP may have been covering it up longer than we thought!

 

[placeholder]

4 minutes ago, rabas said:

 

The rest of the world doesn't have enough welding equipment for a Wuhan lockdown.

 

 

You didn't read the paper!  here.  Though it may have circulated in Italy as early as September, they suggest it was international, not just Italy, and referecne evidence of many early cases in Wuhan (in China). They say:

 

"A second study by Harvard University showed a relevant increase of hospital traffic in the Wuhan region, evaluated by satellite imagery, and COVID-19 symptoms–related queries in search engines, since autumn 2019.¹¹ "

 

A recent massive study of SARS-2 genome evolution traces it back to the mother bug, which they say was several weeks earlier than first reports, likely in China.

 

What does all this mean?  China's CCP may have been covering it up longer than we thought!

 

Actually, the evidence shows that the local CCP was covering it up from the Central Government.

[Salerno]

3 minutes ago, rabas said:

What does all this mean?  China's CCP may have been covering it up longer than we thought!

 

Did you have to post that; you know this thread will be inundated by the usual suspects now 

[tonbridgebrit]

4 hours ago, Salerno said:

 

Did you have to post that; you know this thread will be inundated by the usual suspects now 

Any man who uses his time and effort to criticise or blame China for Covid is being ridiculous and non-productive.  China has handled the Corona bug in the correct way, and that's why the deaths in China have been far lower than deaths in America.

So, what is Germany suppose to do ? What is the point in Germany condemning China for the Corona Virus ?  Will comdemning China reduce the deaths in Europe ? Off-course not.  It's best if we all look forward and try to handle the virus and get our economies to recover. Blasting China for the Covid Virus is not going to help anybody.

[Meat Pie 47]

5 hours ago, sawadee1947 said:

No, she was born in HAMBURG ????

Correct

[tonbridgebrit]

4 hours ago, rabas said:

 

The rest of the world doesn't have enough welding equipment for a Wuhan lockdown.

 

 

I seriously suggest that people like you stop your anti-China comments.  Britain is going to do a Brexit, and a thorough and comprehensive trade deal with China should be at the top of the agenda for the British government.
 

Failure to clinch a massive trade deal with China will be disastrous and catastrophic for Britain. Instead of making comments that hint or imply criticsm of the Beijing government, I suggest controlling the tongue. It might be an idea to go one step further. 
How about inviting a large number of senior Chinese officials to London ? Give them a guided tour of London, bring out the red carpet, and pay for lots of banqueting and slap up meals ? Hopefully, them Chinese will sign an almost 'free-trade deal' between Britain and China.

[Susco]

14 minutes ago, tonbridgebrit said:

Any man who uses his time and effort to criticise or blame China for Covid is being ridiculous and non-productive.  China has handled the Corona bug in the correct way, and that's why the deaths in China have been far lower than deaths in America.

 

That is your opinion, though mine is different.

 

If we look at the world map, it shows that all Asia's developing countries have handled it very well, though the west and Asia's developed countries like South Korea have handled it badly, with China's biggest enemy the US has the most casualties.

 

Something just doesn't add up for me in that picture.

 

 

Edited November 19, 2020 by Susco

[tonbridgebrit]

18 minutes ago, Susco said:

 

That is your opinion, though mine is different.

 

If we look at the world map, it turns that all Asia's developing countries have handled it very well, though the west and Asia's developed countries like South Korea have handled it badly, with China's biggest enemy the US has the most casualties.

 

Something just doesn't add up for me in that picture.

 

 

Hello. Do you reckon it will be a good idea for the US and European governments to condemn and criticise the Beijing government for Covid ? I'm only trying to say, that such action is not going to benefit America or Europe. It's silly to claim that Beijing deliberately released the virus to damage America and Europe. And what effect or impact will be made by having a pop at them Chinese in the Beijing government ?
 

Will critcising them Chinese really make them pay compensation for all this ? Off-course not. For those who really do think that China deliberately did this, for those who reckon that China didn't do enough to stop the virus in the early stages, for those who reckon that China needs to be punished for causing the virus and covering it up. Well, surely, it would be a better idea to make China pay, declare war on China, do it AFTER the world has recovered economically from Covid ?

To try and make China pay the penalty for it now would be absurd. It simply can't be done.

Edited November 19, 2020 by tonbridgebrit

[Susco]

Just now, tonbridgebrit said:

Hello. Do you reckon it will be a good idea for the US and European governments to condemn and criticise the Beijing government for Covid ? I'm only trying to say, that such action is not going to benefit America or Europe. It's silly to claim that Beijing deliberately released the virus to damage America and Europe. And what effect or impact will be made by having a pop at them Chinese in the Beijing government ?
 

Will critcising them Chinese really make them pay compensation for all this ? Off-course not. For those who really do think that China deliberately did this, for those who reckon that China didn't do enough to stop the virus in the early stages, for those who reckon that China needs to be punished for causing the virus and covering it up. Well, surely, it would be a better idea to make China pay, declare war on China, do it AFTER the world has recovered economically from Covid ?

To try and make China pay the penalty for it now would be absurd. It simply can't be done.

 

I didn't say anything about blaming or condemning, I only posted my observations, which actually can be seen by anyone who isn't completely blind.

 

I'm not the least interested in your China jockeying, but maybe you can explain how it is possible that all developing countries in Asia, some with millions of Wuhan Chinese entering their country when the virus was in full bloom, have managed to handle  it so much better than any developed country in Asia or the west.

 

Answers on a postcard please, as I'm not interested in this discussion.

[Susco]

19 minutes ago, tonbridgebrit said:

Well, surely, it would be a better idea to make China pay, declare war on China, do it AFTER the world has recovered economically from Covid ?

 

And to answer that question.

 

China is recovering fast, for all the obvious reasons, and, because the west is still in deep doodoo, gaining power faster as ever before.

 

So you suggest to wait until it is too late?

 

You know what happened in the US in the past 4 years, but none of their "allies" could do much to oppose it, because the US has built their grip on them for the past few decades.

 

The same will happen if you give China a few more years, which it will take for the west to recover from the current situation.

Edited November 19, 2020 by Susco

[Salerno]

I rest my case 555

[Susco]

6 hours ago, sawadee1947 said:

10 hours ago, Deli said:

The German chancellor originates from a commie country...

No, she was born in HAMBURG

 

And moved to East Germany as an infant, where she grew up

[Meat Pie 47]

48 minutes ago, tonbridgebrit said:

Hello. Do you reckon it will be a good idea for the US and European governments to condemn and criticise the Beijing government for Covid ? I'm only trying to say, that such action is not going to benefit America or Europe. It's silly to claim that Beijing deliberately released the virus to damage America and Europe. And what effect or impact will be made by having a pop at them Chinese in the Beijing government ?
 

Will critcising them Chinese really make them pay compensation for all this ? Off-course not. For those who really do think that China deliberately did this, for those who reckon that China didn't do enough to stop the virus in the early stages, for those who reckon that China needs to be punished for causing the virus and covering it up. Well, surely, it would be a better idea to make China pay, declare war on China, do it AFTER the world has recovered economically from Covid ?

To try and make China pay the penalty for it now would be absurd. It simply can't be done.

Yes very true just look at Australia's situation, one of the first country to ask for an inquiry about the virus  and where has it left us? China banned imports of Australian goods now, including cotton, beef, coal ,wine, lobsters, among other things. But go shopping and try to buy Australian made goods is impossible. Every

thing you buy is made in China, even all the cheap cars. Stop buying Chinese stuff and let them suffer.

[Edwin Cameron]

They will 'Rip you Off' then gaol you for nothing..............Wake Up..! This is a Communist nation biding it's time to take down the west.

 

[soalbundy]

4 hours ago, tonbridgebrit said:

I seriously suggest that people like you stop your anti-China comments.  Britain is going to do a Brexit, and a thorough and comprehensive trade deal with China should be at the top of the agenda for the British government.
 

Failure to clinch a massive trade deal with China will be disastrous and catastrophic for Britain. Instead of making comments that hint or imply criticsm of the Beijing government, I suggest controlling the tongue. It might be an idea to go one step further. 
How about inviting a large number of senior Chinese officials to London ? Give them a guided tour of London, bring out the red carpet, and pay for lots of banqueting and slap up meals ? Hopefully, them Chinese will sign an almost 'free-trade deal' between Britain and China.

Throw in free stab proof vests and you may have a winner but sadly for the UK the EU was in China first and they have more clout.