Background

With a trade volume of €252.5 billion in 2025, China was Germany's most important trading partner; German imports from China amounted to €171.2 billion, while exports stood at €81.2 billion. Around 40 per cent of German imports comprised goods for which China accounts for more than half of the sources. In a DIHK survey conducted in September 2026, 60 per cent of companies advocated for reducing strategic dependencies, while 49 per cent called for excluding Chinese companies from critical infrastructure.

Do & Don’ts

What politics should do

• Expand trade relations: The European Union should establish SME-friendly agreements on trade, investments, raw materials, digitalisation, and economic security with other third countries. The EU's neighbouring states should be given special consideration. The supply chain agreement between New Zealand and Singapore could serve as a model for cooperation with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Global rules of the World Trade Organization should be maintained and reformed.
• Make diversification financially viable: Funding and guarantee instruments should be technology-neutral and free from additional bureaucracy. The DIHK also recommends more flexible thresholds for foreign value-added in export credit guarantees.
• Address security risks purposefully: Critical infrastructure and technology areas should be stringently and transparently defined and regularly reviewed. Clear and reliable rules for export controls on dual-use goods are essential.
• Ensure fair competition: Trade protection measures should be coordinated with businesses, address circumvention, and target the originators of trade disruptions. It is crucial to evaluate their impact on upstream and downstream industries before their implementation. Existing instruments should be improved rather than introducing new protectionist measures.
• Strengthen market surveillance: Companies advocate for customs and market surveillance authorities to monitor compliance with product and safety regulations in direct imports and online trade effectively, risk-based, and digitally.
• Promote raw material partnerships: The EU should establish frameworks for resilient supply chains in collaboration with the G7, the Organisation for Economic Co-operation and Development, and other trading partners. Additionally, the raw material strategy and fund should be backed by concrete projects.
• Encourage circular economy and innovation: A competitive circular economy and investments in research and development can help reduce raw material dependencies through product innovations.
• Integrate trade and development policy: The Global Gateway programme should be implemented strategically and in an SME-friendly manner. It is also desirable that EU companies benefit more extensively from European funding.
• Strengthen technological leadership: Targeted investments in research and development and high-technology ecosystems can bolster Europe’s position in strategically important areas and increase resilience against economic pressures.
• Enable China+X: Companies should establish additional production locations and procurement and sales markets without necessarily abandoning their activities in China. For this, the government needs to provide low-bureaucracy tools.

What politics should not do

• No blanket decoupling: Whether dependencies can be considered strategic should be assessed based on the economic significance of the goods, potential supply risks, their substitutability, and alternative sources. The state should not intervene in supply chains unnecessarily in non-critical areas.
• Don’t politicise dependencies: The EU would do well not to jeopardise its role as a reliable trading partner by instrumentalising mutual dependencies. The planned Industrial Accelerator Act should not contradict trade agreements.
• Avoid new supply chain bureaucracy: Authorities should utilise existing data from customs, statistics, and licensing procedures. A potential new diversification instrument is better suited to creating incentives than burdening companies with additional reporting and notification obligations or customs costs.
• No extra scrutiny for foreign investments: A review procedure for investments by European companies abroad could increase legal uncertainties and bureaucracy costs. Instead, existing export control and sanctions rules should be utilised.
• No state price controls and stockpiling outside the security and defence sectors: Instead, the government should support raw material partnerships and processing plants and promote private stockpiling and purchasing cooperatives.
• No blanket compensation fund: A solidarity fund for economic coercion could create disincentives and should not replace corporate risk management.
• Don’t end research collaborations indiscriminately: European companies should retain access to Chinese innovation networks in non-security-critical areas.
• Avoid just shifting dependencies: Reducing strategic dependencies on China only makes sense if it does not create new dependencies on individual other trading partners. The DIHK advocates for broad coalitions based on shared interests.

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