German magazine Der Spiegel on the 30th cited a research report published by researchers from Sussex University and King’s College London, saying that German companies have very close economic and trade ties with the United States and China, if they“Decouple” from either, they will pay a huge economic price.
The researchers examined the dependence of companies listed on Deutsche Börse’s Dax and MDAX indices on sales, production and supply chains, and found that German companies are highly dependent on the economies of China and the US. Automakers and mechanical engineering companies were the most dependent on the Chinese market. In contrast, chemical and pharmaceutical companies are more dependent on the U. S. market and R & D, production layout in the United States. Digital, telecommunications and semiconductor companies are highly dependent on suppliers from China and the United States.
“Leading industrial companies such as Siemens and BMW were built in a highly globalised system and will suffer devastating losses from ‘decoupling’ from both China and the US,” said Steven Rolfe, a political economist at the University of Sussex and one of the study’s authors.
BMW’s revenues in China are higher than in the US and its purchases from Chinese battery supplier Ningde times exceed €1.4 bn, the report said. Siemens derives 24 per cent of its revenues from the US and 12 per cent from China, and the technology group’s supply chain is closely linked to both countries.
German companies generally focus on the Chinese market. BASF (Guangdong) , an 8.7 billion euro integrated plant, recently started full production in Zhanjiang. “Investing in China is no riskier than investing in Europe,” BASF CEO Markus Kammitt told German newspaper Die Zeit. The Chinese market is huge, and over the past 15 years, bASF has been growing steadily faster than the market in China and a new base there“Makes a lot of sense” for the company.