Big Part of German Industry Mulling Plan B to China, Lobby Says

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A large part of the manufacturing-focused companies that power Germany’s economy are rethinking their ties to China, the head of a major lobby group said.

“Within the industry we obviously talk a lot about the war in Ukraine and Russia,” Karl Haeusgen, who leads the VDMA body that represents German machinery companies, told Sueddeutsche Zeitung in an interview. “But at some point, sometimes after just five minutes, we come to talk about China, which is a much bigger topic for us.”

“I would say that a large number of companies are currently working on a Plan B for business in China,” he added. Haeusgen’s own association now offers workshops on how firms can realign themselves, but he warned that it’s not that easy to do.

For years, China has been Germany’s top trade partner, and particularly the automotive industry relies on it as a key market. After Russia’s invasion of Ukraine, however, companies are uncertain whether China will continue to generate large revenues going forward -- especially amid fears that China could face similar economic sanctions in the event that the government tries to forcefully integrate Taiwan.

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