【By Observer News, Wang Yi】Germany, once the "locomotive" of the European economy, has been stuck in economic stagnation for several consecutive years. The latest data released this quarter showed that Germany's gross domestic product (GDP) had zero growth compared to the previous quarter, which has led some people in the country to become desperate and try to imitate the United States by adopting protectionist policies, wielding the "tariff stick".

According to a report by the German newspaper "Frankfurter Rundschau" on November 30, the German state-owned development bank KFW stated on the 27th that, against the backdrop of the ongoing weakening of the German economy, the government should give domestic industries a chance to breathe, and must "go all out on controllable policy levers", with tariffs "being part of the toolbox of economic policy".

In a report released last week, the KFW blamed others unilaterally, claiming that the headwinds currently faced by German industry "are largely due to the economic interventions of other governments, especially China, but not only caused by China".

The German state development bank first laid the groundwork by stating that the rapid rise of Chinese industry is attributed to "strong support from the government to enterprises", so German companies must enhance their own competitiveness to compete with Chinese companies. Then, the bank revealed its true intentions, saying that "in certain sectors that have been particularly affected, tariffs and other measures at the national level may be needed to ensure fair competition within the EU market".

The report further claimed that if Germany continues with a completely "laissez-faire" economic policy, it actually means "handing over the fate of German industry to the policies of other countries to decide".

Based on this, the chief economist of the KFW, Dirk Schmack, said, "As long as China continues its mercantilist model and the US continues its unpredictable 'America First' policy, tariffs must be part of the toolbox of German economic policy".

KFW, foreign media

The report also subtly pointed out that Germany's over-reliance on a single country in critical raw material supply chains is too high, and the risk of such high dependence must be reduced.

However, the KFW also admitted that structural problems in Germany itself also restrict the country's economic development. From high labor costs, complicated regulations, heavy tax burdens, to long-term high energy prices and outdated energy infrastructure, these are all chronic problems weighing on businesses. To alleviate these pressures, the German government must implement reforms, and "may need to provide subsidies for energy prices".

In another study, the bank also mentioned that Germany needs to improve the entrepreneurial ecosystem, and "should create more favorable conditions for start-ups in terms of regulation and tax policy to prevent innovative companies from moving abroad".

The latest data released by the German Federal Statistical Office on November 25 showed that Germany's GDP had zero growth in the third quarter of this year. Although it was an improvement from the 0.3% decline in the second quarter, it still did not match the 0.3% growth in the first quarter, showing that the German economy is still struggling.

Christian Breuer, an economist at the Institute for Macroeconomic Research and Business Cycle Studies (IMK), told the German newspaper "Handelsblatt" that "the continuous weakness of the German economy indicates that the crisis has not ended yet, and the decline in exports to the US and China has posed serious challenges to the German economy".

American tariffs have severely impacted Germany's export-oriented economy. Deutsche Bundesbank President Joachim Nagel pointed out that American tariffs and policy uncertainties are suppressing Germany's economic growth, especially causing significant damage to the industrial sector during its crucial adjustment period.

The United States became Germany's largest trading partner in 2024, with bilateral trade reaching 252.8 billion euros (approximately 2.08 trillion yuan). However, according to the import and export trade data released by the German government on the 19th of last month, the total trade volume between Germany and China from January to September this year was 185.9 billion euros. China surpassed the United States again, becoming Germany's largest trading partner.

Reuters and AFP noted that from 2016 to 2023, China was always Germany's largest trading partner. However, after the German government sought to reduce so-called "long-term economic dependence on China", the United States took the lead in 2024.

As early as July 2023, the German government published a so-called "China Strategy", aiming to urge "risk reduction" and "reducing economic dependence on China", but the specific measures or binding targets were vague.

Lately, the Merkel government has been taking actions towards China. In November this year, the German parliament first appointed an expert committee to re-examine Germany's trade policy towards China; shortly after, Chancellor Merkel declared that Huawei and other Chinese suppliers should be completely excluded from the construction of the country's 6G network, while planning to replace components in the current 5G network with products produced domestically.

However, the German business community does not agree with the "China Strategy" of the German government, and many have spoken out emphasizing the importance of the Chinese market.

Last April, the German Economic Institute released a report stating that Germany's economy is highly dependent on China, and "there is no obvious trend of de-risking". The report found that in 2023, China remained Germany's most important import trade partner. In key product categories such as chemicals, computers, and solar cells, Germany remains "highly or severely dependent on China" (i.e., has a high import dependency on China, with import shares of at least 50%).

Bloomberg also noticed that despite the German government's various warnings about "dependence on China," business leaders do not pay attention. A think tank stated that between 2023 and 2024, German companies' investments in China increased by 1.3 billion euros, reaching 5.7 billion euros, mainly involving the automotive sector. The report bluntly stated, "German companies are making a fortune in China, how can they go back now?"

On November 17, during the fourth Sino-German High-Level Financial and Economic Dialogue, as the first minister-level official of the current German government to visit China, Deputy Chancellor and Finance Minister Christian Lindner reached a series of mutually beneficial and win-win results and consensus with the Chinese side. Lindner stated that Germany is willing to closely cooperate with China in the financial and economic fields, promoting the development of bilateral relations.

Lindner previously told the German news agency DPA, "We should not just talk about China, but directly dialogue with China." China is an important participant in international affairs, "there are many problems in the world, only by cooperating with China can they be solved."

Chinese Foreign Ministry Spokesperson Guo Jianjun pointed out in October that China and Germany, as comprehensive strategic partners, have developed steadily for 53 years since the establishment of diplomatic relations, and both sides should adhere to mutual respect, equality, and win-win cooperation to contribute to world peace and development. At the same time, he also mentioned that there are differences between China and Germany on some issues, but these can be resolved through sincere communication to enhance understanding and trust.

This article is an exclusive work of Observer News, and without permission, it shall not be reprinted.

Original: toutiao.com/article/7578859830924821030/

Statement: This article represents the views of the author.