The BDI has published a new policy paper. It contains 54 of the industry’s demands to Berlin and Brussels to strengthen the European Union in competition with China.

The Federation of German Industries (BDI) has published a new policy paper entitled “Partners and systemic competitors – How do we deal with China’s state-controlled economy? It contains 54 demands on Berlin and Brussels. BDI President Dieter Kempf calls on the Federal Government and the European Commission to strengthen the European Union in competition with China.

System competition between China and Germany

Contrary to earlier expectations, China is not moving towards a market economy and liberalism. “The People’s Republic is establishing its own political, economic and social model”, emphasizes Kempf. “Systemic competition is emerging between our liberal, open and social market economy and China’s state-dominated economy”, the policy paper says.

China as an important driver of the global economy

The opportunities offered by the economic exchange with China will continue to be exploited. China is and remains the driver of the global economy and is an important sales and procurement market for German industry. “However, no one should simply ignore the challenges that China poses to the EU and Germany”, states Kempf.
In the policy paper, German industry demands that companies from non-market economy countries also be bound to the liberal market economy order of the EU if they want to be active in the EU. This requires a strengthened economic policy framework for the European internal market.

BDI President appeals to the EU

“It is essential that the Federal Government once again becomes the banner bearer for a stronger EU”, the BDI President demanded. At the same time, Germany and the EU must invest significantly more in research, development, education, infrastructure and future technologies. “The EU needs an ambitious industrial policy for its strong companies that focuses on innovation, intelligent regulation, social partnership, infrastructure and free trade”, emphasises Kempf.

The 54 demands are intended to serve as a compass in the political debate. The Federation of German Industries (BDI) is calling for EU state aid legislation and anti-subsidy instruments to be tightened up. Effective action should be taken against companies that do not produce in the EU and receive substantial subsidies. The BDI therefore proposes to introduce a new type of subsidy control for foreign investments. This is intended to control and, if necessary, prevent state-financed takeovers of European technology companies. High quality standards in public procurement should also ensure that dumping prices of foreign suppliers can be investigated for subsidies.

The demands relate to the following approaches:

    • Strengthening one’s own competitiveness,
    • a strong and united Europe,
    • Securing the market economy order in Germany and Europe and
    • international cooperation.

Kempf sees China’s duty to act as follows

“We in the German industry measure the Chinese government by its own internationally announced obligations. In its own interest, Beijing should continue to open its domestic market and vigorously implement long-announced economic reforms”, explained Kempf. “The sooner China creates a level playing field between Chinese and EU companies on the world market through economic reforms and market opening, the less new control instruments will have to be used”, the press release says.

The German-Chinese trade volume recently reached 187 billion euros, almost 30 percent of the total trade between the EU and the People’s Republic (2017). China is Germany’s most important trading partner outside the EU. German exports to China amounted to 86 billion euros, imports 101 billion euros. According to the latest official figures, German direct investment in China totalled 76 billion euros (2016). Approximately 5,200 German companies with over one million employees were active in China. The BDI estimates the stock of Chinese investments in Germany at 13 billion euros by the end of 2017.

 

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//CF