Sales markets and supply chains conceived in terms of global politics – German interests in China and India under the sign of the China-USA conflict

In the course of the Covid-19 pandemic, the trade dispute between China and the USA, which has been simmering for several years, has intensified dramatically. The intensified politicization of the conflict has recently become evident in the USA’s new trade policy instruments against Chinese interests and in American considerations to relocate production facilities and supply chains from China. As the beneficiary of current discussions, the focus is increasingly on India.

The changed political discussion does not initially mean any direct economic change for Germany and Europe in their behavior towards China or India. However, Germany’s political and economic interests in these developments and in the two countries are still not discussed enough.

CEO Volker Friedrich moderating the BWA panel

As the chairman of the committee on foreign trade and investment  of the German Federal Association for Economic Development and Foreign Trade (BWA) our CEO Volker Friedrich had the pleasure to moderate a high profile panel discussion in cooperation with Cologne Forum on International Relations and Security Policy (KFIBS e.V.), the Confederation of Indian Industry and CGGT China Going Global Think-Tank  in conjunction with the Asia Berlin Summit on 23rd September 2020 at the prestigeous International Club in Berlin.

About the event

Attendees of the event were, as shown in the picture from left to right: Dr. Stefan Tetzlaff, Johannes Pflug, Dr. Xizhen Wang, Michael Schumann, Dr. Johannes Weisser, Lakshmi Lalita Mohan and Volker Friedrich

The event  started with a keynote by Dr. Stefan Tetzlaff who gave an overview of the China-US-India-Germany affairs and put the present discussion on the US-China trade war in historical and present context. The panel members were equally focused on India and China and gave their assessment on the situations from a political, bilateral and corporate perspective.

Key Takeaways

The key takeaways from the discussion can be summarised as follows:

  1. The media headlines and twitter messages are all very shallow and we all miss a deep and fact-based discussion. The world is too complex to put it into 160 characters.
  2. Regardless of the outcome of the presidential election on 3rd November in the USA, the trade conflict will continue whereas a Biden administration would be more powerful in negotiations with China. We would probably see a more united “West” with the USA and Europe moving ahead together for more fair trade, ethical and environmental standard and a transparent supply chain.
  3. India is presently gaining in terms of more Foreign Direct Investment, especially from the USA (as an example Apple and Facebook invest heavily now in India) and the state visit by president Trump early in 2020 underlined the strong alliance between the two countries. However, India has homework to do especially in the development of its infrastructure, but the country is on the right track. There has been a dramatic improvement in the ease of doing business as surveys have shown (from 136 th to 74th place).
  4. Germany is somehow caught in the middle and still enjoys a moderate role as a friend and supporter of China, India and the USA alike. However, the majority of our audience agreed that in case the relationship with the USA is getting worse, Germany has to have a plan B. The new German concept of the Indo-Pacific partnership is highlighting these options already.
  5. The European Union was heavily critised for not playing a stronger role. Even the big “Green Deal” announced earlier in 2020 seems to be a tiger without teeth. Europe and Germany have to come up with new ideas, solutions, products and services and will not stay competitive if the old business models of the “brick and mortar” industries will be kept alive at all costs while IT, AI and Big Data business are moving ahead on a fast track driven by China, India and the USA.

Where does that leave us?

Finally, we all had consensus that a friendly and respectful partnership is the most desirable outcome and that the way of speaking and communicating with each other should be taken to a new normal. The world and all nations are battling the impact of COVID 19 and while China seems to be back to normal already the fruits of 20 years of successful globalisation are probably in danger. A simple protectionist policy whether in the USA, China, Indian or Europe will have more losers and than winners.

Further, we need creative ideas to compete with China, India and the USA

 

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