The German economy aims to reduce its dependencies on China while warning against additional bureaucracy and government interference. In a new policy paper addressing China-related risks, the DIHK outlines recommendations from the IHK network. According to the experiences of IHK-member companies, businesses require better conditions to establish new suppliers and markets – not additional reporting requirements and investment controls.

The scale of the challenge is evident from trade figures: In 2025, Germany imported goods worth around €171 billion from China, making it Germany's most important supplier, far ahead of the USA with less than €100 billion in goods. Strong dependencies exist in specific raw materials, intermediate products, and technologies, which companies aim to mitigate by sourcing from additional suppliers.

© DIHK / Werner Schuering

"Dependencies on China are significant in some areas of our economy, and this cannot be ignored," says Volker Treier, DIHK's Chief of Foreign Trade. "However, more forms and controls will not create a single alternative supply chain. Companies need additional suppliers, new sales and sourcing markets, as well as better investment conditions."

The pressure to act is considerable: According to a DIHK survey from September, 60% of respondents believe the EU should reduce strategic dependencies. Additionally, 67% call for a united European approach towards China, and two-thirds feel increasing competition from Chinese providers. While 55% at least somewhat support stronger trade measures against China—even if they harm their own businesses—a blanket withdrawal from China is not an option for the economy. Many companies are instead adopting a "China-plus-X" strategy, maintaining existing relations while exploring additional locations, sources, and markets, particularly in Southeast and East Asia.

Diversification Costs – and Requires Political Backing

These recommendations emphasize prerequisites such as new trade and raw material agreements, more accessible financing and guarantee tools, and targeted investments in research, technology, and Europe's raw material supply. This is especially crucial for small and medium-sized businesses, which face significant costs and risks in establishing new supply relationships.

The DIHK is critical of plans for additional reporting requirements under a European Diversification Instrument and new controls on overseas investments. Additionally, it opposes government intervention in raw material pricing or generalized state stockpiling outside of security-sensitive areas. However, for critical infrastructure and security-relevant technologies, strict protective measures are deemed necessary.

It is crucial to accurately identify risks and not equate economic dependencies with security threats. "De-risking should not become just another bureaucratic programme," warns Treier. "If Europe wants to strengthen its economic security, it must become more competitive. This includes open markets, technological strength, and a broader resource base. Replacing dependencies on China with those on other countries is not a solution."

Fair Competition Instead of New Isolation

Businesses also demand stronger protections against unfair trade practices. Existing tools should be applied more swiftly and effectively, while evaluating their impacts on the entire value chain. Additionally, adherence to European product and safety standards, such as in direct imports and online trade, must be monitored more closely.

The recommendations aim for a China policy that combines economic security and competitiveness: managing strategic risks, ensuring fair trade conditions, while providing room for economic cooperation.

The policy paper is available for download: