media review: German companies expand their investments in China

The New York Times reported that some German companies are expanding in China and are reluctant to leave the huge market they need to finance operations in Berlin.

The newspaper added, "At a time when Washington seeks to stifle economic relations with Beijing, two powerful engines of the German economy, Volkswagen and the chemical company (BASF), are expanding their huge Chinese investments."

Volkswagen, which has more than 40 factories in China, has announced a new effort to design models according to the wishes of Chinese customers, and will invest billions in local partnerships and production sites.

And BASF, with 30 production facilities in China, is pushing ahead with plans to spend €10 billion on a new chemical production complex that would rival in size its huge headquarters in Ludwigshafen.

As the American newspaper pointed out, "Across Germany, executives know that these investments run counter to efforts by the United States to isolate China economically. They argue that revenue from China is essential for their businesses to thrive and grow in Europe."

"The profits from China have allowed the company to offset losses from Europe's high energy costs and strict environmental rules," said Martin Brodermüller, CEO of BASF.

According to the New York Times, close trade relations are now under scrutiny in Berlin, at the behest of Chancellor Olaf Scholz, knowing that there was a political proposal to reset the country's relationship with China, its largest trading partner.

According to the newspaper, a study conducted by the Kiel Institute showed that “separation from China would be very costly for the whole of Europe, but in particular for Germany.” About 131 billion euros, and it may cost more, if China responds with other steps.

German President Frank-Walter Steinmeier had said earlier that Germany should "learn its lesson" from Russia's war on Ukraine. The lesson is that "we have to reduce our dependence on others, wherever we can". "This is especially true of China," he added.