The competitiveness of the German machinery manufacturing industry is declining, and it has begun to accuse Chinese peers of unfair competition.

On June 12, the German Engineering Federation (VDMA) stated that Chinese competitors not only benefit from low costs and technological progress but also gain substantial advantages from subsidies. The chairman of the organization called on European politicians to respond with anti-dumping and countervailing duty policies. In the first quarter of this year, the delivery volume of German machinery manufacturers in China plummeted by 12.2% compared to the same period last year, amounting to only 3.99 billion euros.

VDMA pointed out in a statement that Chinese competitors receive large amounts of subsidies, and some products exported to Europe do not comply with EU technical standards. The organization urged German and European politicians to take a series of measures to create a level playing field for European and Chinese enterprises.

Chairman Kaffrat emphasized that Europe has long demanded equal competition, but this demand has been ignored by China, making "equal competition" an empty term. "So now we require at least effective measures within the EU internal market to enforce fair competition. Our companies have suffered enough from China's repeated rule violations in international trade."

In particular, VDMA suggested imposing compensatory tariffs on imported products violating EU anti-subsidy and anti-dumping regulations, while strengthening market supervision and punishing Chinese manufacturers exporting machinery products to Europe that do not comply with EU technical standards; enterprises with a history of non-compliance must undergo third-party certification before exporting products to the European market, and those who repeatedly violate should be banned from exporting to the EU.

How to Maintain European Enterprise Competitiveness?

On the other hand, VDMA also called on the EU to enhance the competitiveness of the European machinery manufacturing industry. The statement pointed out that to avoid dependence on China in this field in the future, the EU should adopt "industrial policy tools" to support "strategic key technologies" in defense, climate, energy, and other fields. The organization believes that when purchasing such products, the EU should not only consider price factors but also examine "the reliability of suppliers" and appropriately introduce "local production ratios."

This industry organization, which encompasses over 3,600 machinery manufacturing enterprises, warned that although many German companies still maintain a slight technological advantage over their Chinese counterparts, whether this advantage can be maintained depends on government support for industry innovation, particularly research and development. Additionally, the EU should ensure that related R&D results funded by the government do not inadvertently leak to places like China.

In addition, VDMA requested the German government to clarify as soon as possible which machinery products need to be restricted for export to China, "current uncertainties have disrupted deliveries to the Chinese market, and approval often takes several months. Especially when Chinese competitors are already able to produce comparable products."

Gaining control of the formulation of technical standards, accelerating the signing of free trade agreements with countries other than China, reducing bureaucracy, and lowering corporate tax burdens are also requirements mentioned in this statement. Before issuing this statement, VDMA discussed the challenges posed by current Chinese competitors and the political support they hope to receive with numerous member enterprises under its umbrella. In the first quarter of this year, the delivery volume of German machinery manufacturers in China fell by 12.2% compared to the same period last year, amounting to only 3.99 billion euros.

Germany's share of the international market for machinery exports dropped slightly to 15.2% between 2013 and 2023, but China's share surged from 14.3% to 22.1%. Earlier this year, VDMA China General Manager Bachowski once told the German "Handelsblatt" in an interview that German engineering companies would find it increasingly difficult to win competitions due to the prices offered by Chinese competitors, which are sometimes 50% lower or even lower. A survey by the German Chamber of Commerce in China (AHK China) also showed that more than half of German companies operating in China expect that their Chinese competitors will become innovation leaders in their industries within the next five years.

Source: DW

Original article: https://www.toutiao.com/article/1834813362540572/

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