Statistics of the 1st quarter: Exports to China fall significantly

China, the second largest economy in the world, has lost much of its importance for German exporters. At least that is the result of preliminary export data from the Federal Statistical Office for the first quarter.

According to the Federal Statistical Office, exports from German companies to China fell significantly in the first three months of the year. Preliminary calculations by the statisticians available to the Reuters news agency show this.

Exports to the People’s Republic shrank by 12.0 percent in the quarter compared to the same period last year. They amounted to only 24.1 billion euros.

China’s recovery “passes Germany by”

The development surprises in two respects and possibly represents the beginning of a new trend. On the one hand, the Chinese economy grew surprisingly strongly from January to March after the corona restrictions were lifted: Gross domestic product rose by 4.5 percent from January to March, the strongest quarterly growth in a year.

But the hopes of German exporters to participate in the new upswing have apparently not been fulfilled. “China’s economy may be recovering, but the impact on German exports will be very different from when the global financial crisis was overcome in 2009,” Reuters quoted the chief economist at the Mercator Institute for China Studies (MERICS), Max Zenglein, as saying.

After the leadership in Beijing surprisingly announced the end of the strict corona policy with recurring lockdowns of entire metropolises at the end of 2022, the Chinese are traveling more, going out and dressing in new clothes. “The post-corona growth is fueled by consumption,” says Zenglein. “So that goes past Germany.”

Nevertheless, German exporters remain optimistic

On the other hand, the decline in exports to China was not able to slow down German exports as a whole. From January to March they increased by 7.4 percent to more than 398 billion euros. More goods were delivered to the USA in particular, but also to neighboring European countries. According to the Federal Statistical Office, more than half of the exports went to EU countries in March. The USA had a share of around ten percent, and around five percent of German exports went to the United Kingdom in March. China was only just ahead in the month under review.

According to a current survey by the ifo Institute, German exporters remain confident. In April, the barometer for their export expectations climbed by 2.8 to 6.9 points, as the ifo Institute announced at the end of April.

Long term trend?

According to a study by the Federation of German Industries (BDI) from April, the importance of the People’s Republic for German exports could decrease in the long term in the coming years. The Chinese market could then be increasingly served by German investors through local production – with possible consequences for jobs in Germany. The BDI researchers also believe that there is increasing “system rivalry” with China.

Experts such as Merics chief economist Zenglein expect that the share of exports to the People’s Republic of total German exports will “level off at a lower level”. It is already only around six percent, after having been around eight percent at times.