Competitive pressure from China for German companies - German Economic Institute (IW)
www.iwkoeln.de
A firm survey conducted in March/April 2024 as part of the IW-Zukunftspanel among around 900 German companies from the manufacturing and industrial services sectors shows that around 350 of the companies surveyed have Chinese competitors in their markets.

cross-posted from: https://feddit.org/post/249116

Here is the study (pdf)

Although Chinese companies are seen as innovative, government subsidies that violate the rules of the World Trade Organization (WTO) are also thought to be behind the high competitive pressure.

German firms estimate the probability of a trade war with China due to the Taiwan conflict in the next ten years to be high at around 70 per cent.

The companies’ approval rates for tariffs on subsidized Chinese e-cars and the possible prevention of sensitive technology transfer, which threatens to transfer high technology from German companies to the Chinese military, are also remarkably high.

  • Around 80 per cent of German companies consider tariffs on Chinese products, including e-cars, as justified or partially justified, according to a survey by The German Economic Institute in Cologne. The business community’s high approval rates for a tougher approach towards China are based on threats its technology could be used by China for military purposes and the “extraordinarily high and widespread subsidies in China”, which suggests that “the ability of Chinese firms to offer much lower prices is not the result of fair competition alone”, the study authors says.
  • “The use of trade defense instruments has nothing to do with protectionism,” the study says, adding that “these instruments are legitimized by the World Trade Organization (WTO)”. The aim of an anti-subsidy investigation is precisely to distinguish between fair and unfair (subsidy-induced) competitive pressure.
  • “Given the lack of transparency of subsidies in Chinese state capitalism, [subsidy investigation] is a certain challenge,” the researcher say. However, should the EU investigation infer subsidies that are higher than in reality, China would have the opportunity to provide evidence to the contrary.
  • For now, however, “China’s subsidization is a violation of the rules and ultimately a protectionist measure”. The researchers add: “All too often, statements by high-ranking German politicians suggest that the EU and Germany are putting themselves in the wrong by using anti-subsidy measures. The opposite is the case.”
  • At least half of the companies (this also applies to the various depicted subgroups) state that Chinese competitors offering comparable products undercut their prices by more than 20 per cent. Chinese companies even enter the market with prices that are more than 30 per cent lower than those of the companies surveyed. This applies to 63 per cent of companies that feel strong competitive pressure from China, but also to 37 per cent of innovative companies, i.e. firms that continuously conduct research and development.
  • China’s subsidy regime has consequences for industrial employment in Germany, the researchers claim. Although Chinese companies are seen as innovative, government subsidies are also thought to be behind the high competitive pressure.
  • The researchers add that in view of China’s export offensive, it is “important to show that the EU is prepared, if necessary, to use its toolbox against Chinese distortions of competition and Chinese threats”.
  • Viking_Hippie@lemmy.world
    46·
    6 months ago

    Guess what: Chinese cars aren’t even made in Xinjiang.

    Politicians are just conflating two completely unrelated issues to drum up support for eliminating the supply of cheaper in demand products that consumers prefer over the overly expensive choices from the Western owner donors.

    We agree that the ethnic cleansing and slavery in Xinjiang is absolutely abhorrent and that workers throughout China should have much better wages and conditions, but this would have no effect on the former and devastatingly negative consequences for the latter.

    • 0x815OPEnglish
      51·
      6 months ago

      Chinese cars aren’t even made in Xinjiang.

      First, your statement is outright false, one example being the plant operated until recently by a subsidiary of SAIC-Volkswagen near Urumqi, the capital of China’s Xinjiang Region. Volkswagen had to leave the joint venture with SAIC exactly over forced labour allegations.

      And second, even if true it wouldn’t matter as forced labour in China doesn’t just take place in Xinjiang alone. There are many other examples across the country.

      [Edit typo.]

      • Viking_Hippie@lemmy.world
        26·
        6 months ago

        Even so, tariffs on Chinese cars won’t do anything to lessen the problem of slavery and will hurt Chinese workers and people who want to wean themselves off fossil fuels IMMENSELY.

        The two issues of tariffs and slavery aren’t related and that you’re using the former as a defense department the latter is a sign that you don’t have any real reasons not to oppose such destructive protectionism.

        It’s like saying that there should be a tariff on American cars because number plates are being made via penal slavery.

        • 0x815OPEnglish
          52·
          6 months ago

          @Viking_Hippie First your are claiming that Chinese cars aren’t manufactured in Xinjiang. When I provide evidence that this is false, you say “even so” and repeat your opinion. It seems whatever one says, no matter if evidence proofs otherwise, you “know” it better, continuing with your false narrative and spreading your opinion. Some may find such conversations funny, I say it is waste of time.

          Your points in your statement above are false again.

          • Viking_Hippie@lemmy.world
            25·
            6 months ago

            Nope. The location of the factories was never the point.

            The point is what the effects of tariffs would be: they would help the bottom line of Western competitors and nothing else at the expense of Chinese workers and German consumers. It wouldn’t help Chinese slaves in any way.

            THAT’S the point. THAT’S what matters.

            It seems whatever one says, no matter if evidence proofs otherwise

            Dude. You haven’t presented any evidence. You have CLAIMED that there is a car factory in Xinjiang and, rather than waste a bunch of time and energy confirming or disproving your claim, which is irrelevant to tariffs, I reiterated the important part.

            continuing with your false narrative and spreading your opinion

            I’m not making any false claims (with the possible exception of mistakenly thinking that there’s no car factories in Xinjiang) and the fact that the ones paying for the tariffs would be Germans buying more expensive cars as well as Chinese workers losing their jobs as their employers lose market share is just that: a fact. NOT an opinion.

            To quote yourself to yourself, your points in your statement above are false again.