Latest news with #BertramKawlath
The Star
14 hours ago
- Automotive
- The Star
Cheerleaders to critics: German machinery makers call for EU action on China
Germany's iconic machine makers used to be among the loudest cheerleaders for ever-closer economic ties between China and Europe. Now, as exports dwindle and facing 'increasingly strong [Chinese] competitors' beefed up by 'unfair state subsidies', the industry is demanding that Brussels put in place trade barriers to protect it. A new position paper published on Thursday by the Mechanical Engineering Industry Association (VDMA), representing medium-sized manufacturers that help constitute Germany's famed Mittelstand group of businesses, marks a dramatic reversal for an industry that until recently lauded the Sino-German economic miracle. 'The EU should impose countervailing duties on imports from third countries if they violate EU anti-dumping or anti-subsidy rules. China is a particular focus here with its aggressive export policy,' read the VDMA's paper. The industry group – whose 3,600 members make everything from power transmission systems and machine tools to semiconductor machines and precision tools – made clear that it was ready to compete with Chinese rivals on a level playing field. However, it was also unequivocal that it feels those conditions do not exist and that it wants governments to intervene. 'Chinese companies are heavily subsidised by the government. And they supply products to Europe that sometimes disregard our technical regulations. China is not playing fair, and politicians must respond to this,' said Bertram Kawlath, VDMA's president. The paper marks a break from decades in which German industry grew rich from selling machines made for powering the workshop of the world. Since the Covid-19 pandemic, the VDMA has turned sharp critic of a harsh new reality in Germany's economic ties with China. It has spoken of being out-competed by fierce rivals in China, Europe and third markets. It will provide an early challenge for new Chancellor Friedrich Merz, who has taken a tougher rhetorical line on China than predecessor Olaf Scholz, but who will also have to deal with the country's powerful automotive lobby, whose views are unrecognisable from those of the VDMA. While Scholz backed the EU's de-risking strategy, research has shown that this support did little to unpick Germany's dependencies on China for critical goods. 'Compared to the previous year, there has been little change in Germany's potentially critical import dependency on China,' wrote Juergen Matthes of the German Economic Institute in an assessment published last week. The VDMA's statistics showed a substantial loss of market share in China for its companies. German machinery went from holding a 20.4 per cent share in China's import market in 2015 to 15.1 per cent in 2024. The shipments were down 12.2 per cent over the first quarter of 2025 year-on-year, German government stats showed, exacerbating a trend of declines in five of the last six years. 'Supported by the 'Made in China 2025' strategy, Chinese mechanical engineering companies have become increasingly strong competitors on the global market. Unfair state subsidies for Chinese companies play a major role in international business,' the paper said. The figures chime with broader German and EU trends: over the first five months of 2025, EU exports to China fell 7.3 per cent compared with a year earlier, while Germany's shipments fell 5.9 per cent. At the same time, China's shipments to Germany and Europe are booming. In May alone, exports to Germany – the EU's largest economy – soared 21.5 per cent, following 20.3 per cent growth in April. To France, shipments were up 24.1 per cent in May, stoking fears that Europe will become a 'dumping ground' for Chinese products that are effectively blocked from the United States due to sky-high tariffs. Soapbox, a newsletter focused on Chinese trade, forecast that for 2025 as a whole, Switzerland will import more from the EU than China, the world's second largest economy. The VDMA's intervention comes amid a clamorous debate over the direction of the EU's China policy and ahead of a crunch summit in July, where leaders will meet in Beijing to discuss thorny issues from trade gripes to China's ties with Russia. With the return of US President Donald Trump to the White House and his swift abandonment of the transatlantic alliance, many expected Europe and China to patch up their many differences. A growing body of evidence is emerging, however, to suggest that this will be more difficult than anticipated. While China's commerce ministry has talked up the prospect of a blockbuster deal on electric vehicles – which would see EU tariffs imposed last year replaced with a minimum import price – EU officials and diplomats said that was highly unlikely in the short term. Briefing ambassadors from the bloc's 27 member states on Wednesday, meanwhile, the European Commission gave no hint that a deal was close, diplomatic sources said. - South China Morning Post
Reuters
12-06-2025
- Business
- Reuters
German engineering group calls on EU to put pressure on China over rare earths
DUESSELDORF, Germany, June 12 (Reuters) - German plant and equipment makers are increasingly struggling with supply bottlenecks for rare earths, the VDMA industry association warned and called on the European Union to put more pressure on China. "We are already seeing that rare earths are no longer reaching our member companies," VDMA president Bertram Kawlath told journalists. China, which controls over 90% of global processing capacity for rare earths used in everything from automobiles and fighter jets to home appliances, imposed restrictions in early April requiring exporters to obtain licenses from Beijing. The tighter restrictions followed the opening of a trade war between the U.S. and China after President Donald Trump imposed tariffs on Chinese imports. VDMA CEO Thilo Brodtmann said that a whole range of materials are affected by the bottlenecks, including nitrocellulose and germanium. Brodtmann, who said China was using the measures to exert pressure, called for the EU to negotiate to resolve the blockade but also stressed that other suppliers needed to be found in the medium and long term. If there are no other suppliers, the EU and the German government must negotiate with the Chinese at the highest level to lift the export restrictions, Kawlath said. "We are also in competition with the U.S., which is currently keen to secure special rights to these products," added Kawlath. U.S. and Chinese officials said on Wednesday that they had agreed to ease China's export restrictions on rare earths.
