Given the shaky state of Japan's economy, China is on course to become Germany's most important trading partner in the Far East. Economics Minister Werner Müller is currently in Beijing to lend political support.
Trade with China: Germany would like to sell Transrapid trains and a lot more to its second-biggest trading partner in Asia
One of Werner Müller’s main objectives during his trip to China this week has been to secure a travel agreement that will pave the way for Chinese tourist groups to visit Germany. From Beijing's point of view, the document is a fundamental precondition for large-scale private travel to Germany. Most of the 236,000 Chinese who visited last year were traveling on business.
Along with China’s Foreign Trade Minister Shi Guangsheng, Müller also finalized a deal on German investments in China, underscoring the increasing weight of bilateral trade ties and aimed at improving conditions for German investors. Germany has long been China's most important trading partner in Europe.
"China is one of our most significant markets," said executive Arnd Wirtz, a member of Müller’s delegation, which included leading German executives from the banking, construction, insurance and tourism industries. Wirtz's company, Bombardier, is hoping to sell underground railway cars to Beijing as the Chinese capital prepares to host the Olympic Games in 2008.
Phenomenal growth rates
Though Japan remains Germany's most important economic partner in the Asia-Pacific region, trade with Japanese companies is currently going through a tricky phase, largely due to the general state of the Japanese economy. German exports to Japan stagnated last year and imports actually dropped by 16 percent. Overall trade amounted to 35 billion euro ($34.5 billion) according to the German Federal Statistical Office.
In terms of growth, the contrast is quite clear. German exports to China grew by over 35 percent in 2000 and by almost 28 percent in 2001, totalling nearly 12 billion euro ($11.8 billion) – just one billion less than the figure for Japan. German firms have invested around seven billion in China and, with several large scale projects on the drawing board, that sum is likely to double in the near future. German capital has been ear-marked for China’s mining, vehicle and petrochemical industries. Again, China is rapidly catching up with Japan where German firms have invested about nine billion.
Only last Friday, the Chinese subsidiary of German car manufacturor Audi delivered its fifty-thousandth vehicle. But China is also an important market for Audi models made in Germany itself, including the company’s luxury model, the A8. Audi exports to China rose by 81 percent during the first half of 2002.
China’s accession to the World Trade Organization (WTO) is also opening doors for Germany’s finance sector. Last week, insurance giant Allianz announced plans for a joint venture with Guotai Jun’an Securities. The new company, Guotai Jun’an Alliance Fund Management, is due to start business in 2003.