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Frankfurt / Main. The German Bundesbank warns against growing competition from China. According to the latest monthly report from the central bank, the "shift towards higher value products" could put increasing pressure on German exporters
In addition, products could become more expensive in Germany as wages rise sharply in Germany. China. The average income in China still represents only a quarter of what is paid in the United States, says the report. However, the average monthly wage in the manufacturing sector increased from 160 dollars (137 euros) to 800 dollars (684 euros) between 2005 and 2017, so many textile companies migrated to other low-wage countries such as Vietnam. or Bangladesh. However, one may wonder for how long these countries will still have enough cheap manpower to sell T-shirts in Germany as cheaply as before.
Competitive pressure on electric cars
The increase in consumption in China offers a good sales opportunity to German exporters: German products – such as cars – are still in high demand because of their quality. With its "Made in China 2025" strategy, however, Chinese leaders are focusing specifically on these areas. For example, German manufacturers play no role in China's large electric vehicle market. On the contrary, it is to be expected that China exports its electric cars in the medium term. China's competitive pressure is also steadily increasing in many other sectors.
Chinese imports have increased only moderately in recent years. According to the Bundesbank, German exporters have been able to maintain their market share there – but this is becoming increasingly difficult. The country is currently the third largest market for German products, conversely, Germany imports more from any country than from China.
Custodians also warn of risks in China's financial markets, which could affect the world because of the strong interdependence. The dangers for China's financial stability are mainly due to the high level of debt and the shadow banking sector. (APA / AFP)
("Die Presse", printed edition, 24.07.2018)
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