Decoupling from China and taking political distance from the Asian country would be more dangerous than beneficial for the European Union (EU), a recent op-ed in the German magazine Spiegel has said.
Decoupling in an attempt to reduce European dependency on China would create more risks than it would eliminate, the op-ed claimed.
China has become increasingly important for European trade, overtaking the United States as the EU’s largest trading partner in 2020. With traded goods worth 696 billion euros (745 billion U.S. dollars), the country represented 16 percent of the bloc’s total trade in 2021, according to official figures.
Rare earths and solar modules from China are particularly important for green energy transformation in Europe. More than 80 percent of solar modules and as much as 90 percent of Europe’s rare earths are imported from China.
Even with a shift away from China, Europe would still be dependent on imports from Latin America, Africa and Asia. “A world in which trade flows are geo-strategically restricted and divided up is therefore the last thing the confederation of states needs for its ‘Green Deal’,” the op-ed warned.
Many product groups from China are “indispensable for the German economy,” the Kiel Institute for the World Economy (IfW Kiel) said earlier this year. At this time, electronic goods such as laptops had reached an import share of around 80 percent.
In 2022, China was Germany’s most important trading partner for the seventh year in a row, as goods worth 298.6 billion euros were traded between the two countries, according to figures from the Federal Statistical Office (Destatis).
“Decoupling our economy from the Chinese market would not be in the interest of jobs in Germany. Others would take our place,” German Minister of Finance Christian Lindner stressed earlier this year.
Decoupling would cause German citizens’ incomes to plummet by two percent, according to a recent study by the Austrian Institute for Economic Research (Wifo), which would result in losses of almost 60 billion euros to Europe’s largest economy. (1 euro = 1.07 U.S. dollar)