Artem Voloskovets
In recent years the trade between Germany besides China is changing because exports are lower and imports are higher than they were before the pandemic. To see those changes, Econovis provided data that covers the period ending in August 2024. For the twelve months before this date, Germany sent goods to China that are worth €94.5 billion and received goods that are worth €92.0 billion. By calculating the totals, the trade surplus is €2.44 billion, which is a small amount relative to the total trade.
But recent monthly data shows that the situation is now different. On July 2024, Germany had a trade deficit of €0.62 billion and in August 2024, the deficit is €1.27 billion. As those figures show, Germany is now spending more on Chinese goods than it receives from selling its own. Since 2019 the amount that Germany exports to China is 1.9% lower, while the amount it imports is 19.6% higher. Due to the figures, the trade relationship is no longer balanced in the same way it was before the pandemic.
If we look at the period between 2000 and 2024, German exports grew at a rate that is nearly double the growth of imports. With this history in mind, the current change is an important event for the economy. It is possible that the period where Germany sold more than it bought is ending. And because German industry is built on selling goods to China, this change is significant for the country.
There is a risk that German companies are less competitive in this market than they were in the past. If imports stay high and exports stay low, there is less profit for companies and the economy grows more slowly. In this new period, Germany is more dependent on products from China and its trade advantage is smaller than the advantage it had before the pandemic.
Artem Voloskovets
