Focus
Highlights of 2018 China-Germany Economic and Trade Cooperation
By Zhou Hua | Updated: 2019-01-10 11:18
        Zhou Hua

The year 2018 witnessed a robust economic and trade cooperation between China and Germany, as indicated in the frequent mutual high-level visits as well as the increasing interactions between the two nations' enterprises.

The top-level visits and exchanges are key to enhance political mutual trust. On May 24-25, German Chancellor Angela Merkel visited China for the 11th time since she first took office. During the visit, both sides agreed on various issues such as expanding trade and investment, and promoting cultural exchanges. In Shenzhen, a city known for opening up, Merkel spoke on forging a closer partnership to nurture innovation in the digital age, so that China and Germany would be better prepared for the future.

From Jul 8 to 10, Chinese Premier Li Keqiang led a delegation to Germany to host the fifth round of China-Germany Inter-Governmental Consultation, and also made an official visit to the country. During his trip, China and Germany signed a raft of agreements worth some $30 billion, covering a number of fields. Li and Merkel issued a joint declaration entitled Responsible Partners for a Better World, demonstrating both sides’ good will and resolution for further strengthening economic ties.

From Nov 25-28, Vice-premier Liu He visited Germany and met with Merkel. On behalf of their respective governments, they exchanged insights on strengthening cooperation on finance, trade and investment.

On Dec 10, President Frank-Walter Steinmeier of Germany visited China. The two countries reached a consensus on increasing mutual understanding, deepening cooperation in various fields, safeguarding free trade and other issues.

The strengthening understanding between Chinese and German governments has injected vitality to the cooperation at the local level and in business sector.

Liuzhou city of Guangxi Zhuang autonomous region, hosted the 2018 China-Germany Intelligent Industry Development Forum in June. At the forum, a memorandum on industrial technology innovation alliance and cooperation was signed, and the Chinese-German Liuzhou Industrial Park was launched.

On Sept 25, the China-EU (China-Germany) Forum for Economic and Trade Cooperation was held in Beijing discussing the best practices to strengthen bilateral cooperation mechanisms in the context of the Belt and Road Initiative, to seize the new opportunities brought by aligning Chinese reform and opening-up with the Industry 4.0 strategy of Germany. At the forum also announced the establishment of the China Office of German Federal Economic Committee and the Sino-German Economic Cooperation Development Promotion Committee.

In 2018 the cooperation between companies, especially the automobile manufacturers, continued to increase. To better tune in to the Chinese market, on July 9, BMW Group and Brilliance Group signed a strategic framework agreement on the long-term development of BMW Brilliance. Both agreed to the investment plans for BMW Brilliance, and the R&D and manufacturing strategy for new energy cars.

On the following day, BMW Group and Great Wall Motor established a joint-venture Spotlight which will introduce the production line of BMW Mini electric cars to China, a gambit to gain a share of the booming Chinese market for new energy vehicles.

Cross-industry cooperation between Chinese and German companies has also increased. Huawei and Audi signed an MOU in July on in-depth cooperation in automatic driving, digital service development and intelligent internet of vehicles. New energy technology company Ningde Times signed an investment agreement with Thuringian state government in July to establish a battery production base and a R&D center of intelligent manufacturing technology in Erfurt.

The second China-Germany Automobile Conference was hosted in Nanjing, Jiangsu province on Nov 29. Participants had constructive discussions about potential cooperation and exchanges regarding the intelligent electric automotive industry and the optimization of conventional auto parts, with a raft of agreements signed.

Germany’s trade surplus grows

Data from Chinese Customs show that from January to November 2018, the volume of China-Germany bilateral trade reached $168.98 billion, representing year-on-year growth of 8.1 percent and accounting for nearly 4 percent of China's total imports and exports.

Specifically, China’s exports to Germany were $70.457 billion, a year-on-year growth of 6.7 percent and accounting for 3.1 percent of China’s total exports and 28.99 percent of Germany’s total imports.

China’s imports from Germany hit $98.52 billion, a 9.2 percent year-on-year increase, accounting for 5 percent of China’s total imports. From January to November, Germany’s trade surplus with China was $28.06 billion, a year-on-year increase of 16.7 percent.

The growth of bilateral trade has slackened pace in the first 11 months of this year, compared with the corresponding period of 2017. Last year, the bilateral trade volume between China and Germany increased by 13.7 percent, year-on-year, while the growth rate of this year was only 8.1 percent. In 2017, China's exports to Germany increased by 11.9 percent year-on-year, and this year, the figure was only 6.7 percent. However, the momentum is steady, without any significant fluctuations, which shows great potential and broad prospects for China-German economic and trade cooperation.

In conclusion, the year 2018 has seen a continuation of the stronger trading cooperation and closer economic ties between the two nations. The diversified, multi-level and multi-dimensional cooperation will pave the way for both countries to chug along in their relationship.

It is projected that China and Germany will come even closer economically in 2019. On the one hand, cooperation in high-end manufacturing such as automobile and machinery industries will become tighter; on the other, cooperation in 5G and new energy application will be gradually pursued. Thus, prospects for cooperation will become even brighter.

Zhou Hua is a researcher of the German Studies Center and associate professor of the School of Economics & Management, Tongji University. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.

(Fan Jiachen and Ding Xijian from the School of Economics & Management of Tongji University contributed to this article)

(This article was translated by Hou Sheng)

        Zhou Hua

The year 2018 witnessed a robust economic and trade cooperation between China and Germany, as indicated in the frequent mutual high-level visits as well as the increasing interactions between the two nations' enterprises.

The top-level visits and exchanges are key to enhance political mutual trust. On May 24-25, German Chancellor Angela Merkel visited China for the 11th time since she first took office. During the visit, both sides agreed on various issues such as expanding trade and investment, and promoting cultural exchanges. In Shenzhen, a city known for opening up, Merkel spoke on forging a closer partnership to nurture innovation in the digital age, so that China and Germany would be better prepared for the future.

From Jul 8 to 10, Chinese Premier Li Keqiang led a delegation to Germany to host the fifth round of China-Germany Inter-Governmental Consultation, and also made an official visit to the country. During his trip, China and Germany signed a raft of agreements worth some $30 billion, covering a number of fields. Li and Merkel issued a joint declaration entitled Responsible Partners for a Better World, demonstrating both sides’ good will and resolution for further strengthening economic ties.

From Nov 25-28, Vice-premier Liu He visited Germany and met with Merkel. On behalf of their respective governments, they exchanged insights on strengthening cooperation on finance, trade and investment.

On Dec 10, President Frank-Walter Steinmeier of Germany visited China. The two countries reached a consensus on increasing mutual understanding, deepening cooperation in various fields, safeguarding free trade and other issues.

The strengthening understanding between Chinese and German governments has injected vitality to the cooperation at the local level and in business sector.

Liuzhou city of Guangxi Zhuang autonomous region, hosted the 2018 China-Germany Intelligent Industry Development Forum in June. At the forum, a memorandum on industrial technology innovation alliance and cooperation was signed, and the Chinese-German Liuzhou Industrial Park was launched.

On Sept 25, the China-EU (China-Germany) Forum for Economic and Trade Cooperation was held in Beijing discussing the best practices to strengthen bilateral cooperation mechanisms in the context of the Belt and Road Initiative, to seize the new opportunities brought by aligning Chinese reform and opening-up with the Industry 4.0 strategy of Germany. At the forum also announced the establishment of the China Office of German Federal Economic Committee and the Sino-German Economic Cooperation Development Promotion Committee.

In 2018 the cooperation between companies, especially the automobile manufacturers, continued to increase. To better tune in to the Chinese market, on July 9, BMW Group and Brilliance Group signed a strategic framework agreement on the long-term development of BMW Brilliance. Both agreed to the investment plans for BMW Brilliance, and the R&D and manufacturing strategy for new energy cars.

On the following day, BMW Group and Great Wall Motor established a joint-venture Spotlight which will introduce the production line of BMW Mini electric cars to China, a gambit to gain a share of the booming Chinese market for new energy vehicles.

Cross-industry cooperation between Chinese and German companies has also increased. Huawei and Audi signed an MOU in July on in-depth cooperation in automatic driving, digital service development and intelligent internet of vehicles. New energy technology company Ningde Times signed an investment agreement with Thuringian state government in July to establish a battery production base and a R&D center of intelligent manufacturing technology in Erfurt.

The second China-Germany Automobile Conference was hosted in Nanjing, Jiangsu province on Nov 29. Participants had constructive discussions about potential cooperation and exchanges regarding the intelligent electric automotive industry and the optimization of conventional auto parts, with a raft of agreements signed.

Germany’s trade surplus grows

Data from Chinese Customs show that from January to November 2018, the volume of China-Germany bilateral trade reached $168.98 billion, representing year-on-year growth of 8.1 percent and accounting for nearly 4 percent of China's total imports and exports.

Specifically, China’s exports to Germany were $70.457 billion, a year-on-year growth of 6.7 percent and accounting for 3.1 percent of China’s total exports and 28.99 percent of Germany’s total imports.

China’s imports from Germany hit $98.52 billion, a 9.2 percent year-on-year increase, accounting for 5 percent of China’s total imports. From January to November, Germany’s trade surplus with China was $28.06 billion, a year-on-year increase of 16.7 percent.

The growth of bilateral trade has slackened pace in the first 11 months of this year, compared with the corresponding period of 2017. Last year, the bilateral trade volume between China and Germany increased by 13.7 percent, year-on-year, while the growth rate of this year was only 8.1 percent. In 2017, China's exports to Germany increased by 11.9 percent year-on-year, and this year, the figure was only 6.7 percent. However, the momentum is steady, without any significant fluctuations, which shows great potential and broad prospects for China-German economic and trade cooperation.

In conclusion, the year 2018 has seen a continuation of the stronger trading cooperation and closer economic ties between the two nations. The diversified, multi-level and multi-dimensional cooperation will pave the way for both countries to chug along in their relationship.

It is projected that China and Germany will come even closer economically in 2019. On the one hand, cooperation in high-end manufacturing such as automobile and machinery industries will become tighter; on the other, cooperation in 5G and new energy application will be gradually pursued. Thus, prospects for cooperation will become even brighter.

Zhou Hua is a researcher of the German Studies Center and associate professor of the School of Economics & Management, Tongji University. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.

(Fan Jiachen and Ding Xijian from the School of Economics & Management of Tongji University contributed to this article)

(This article was translated by Hou Sheng)