German industry association pushes for Europe to diversify away from China

The German industry association BDI on Friday called for a more determined effort to reduce economic risks linked to China, arguing that Europe must diversify supply chains and forge new partnerships while avoiding broad-based protectionism.

The BDI, representing major German manufacturers, said in a policy paper that “de-risking” should be pursued more consistently, though it stopped short of spelling out specific measures.

German industry has been increasing pressure on Chancellor Friedrich Merz to take a tougher line towards Beijing, with companies calling for stronger action to address what they describe as unfair competition from Chinese rivals.

“Systemic competition with China’s economy is increasingly challenging the open social market economy and requires an appropriate industrial and trade policy response,” said BDI’s chief executive Tanja Goenner.

The EU should have tools to respond rapidly to unfair competition, such as anti-dumping and anti-subsidy measures, Goenner said, while warning that any new trade defence measures must be carefully calibrated.

The BDI also urged Germany and the EU to broaden ties with other regions based on economic and security interests.

Europe should also take a more assertive approach towards the US, the BDI said.

“Where protectionist measures by the US impair the competitiveness of European companies, appropriate European countermeasures should be considered, without undermining the long-term strategic relationship,” Goenner said.