BDI calls for growth and competitiveness as top priorities and criticizes dependence on China and the USA

Against the backdrop of the crisis and reform debate, German industry has called for growth and competitiveness to be made the top priority. In addition, Germany and Europe should more consistently reduce their dependencies on China, according to a policy paper by the Federation of German Industries (BDI).

“Germany as a business location is under massive pressure,” says the paper “Principles of Economic and Trade Policy.” Therefore, “new economic policy decisions are necessary in many areas.” A consistent growth, competition and regulatory policy is “just as indispensable as a well-balanced energy and climate policy, an adequate foreign trade framework and a consistent digital and innovation policy.”

The BDI sees the paper as a common guideline for the 38 member associations with around 100,000 individual companies. “This is an assurance for ourselves,” said BDI General Manager Tanja Gönner. At the same time, it is a positioning of German industry for the next few years.

Dependence on China

The automobile industry, for example, is heavily dependent on China as a large sales market. The People's Republic also has a dominant position in numerous intermediate products and raw materials, which makes German companies vulnerable. Supply chains cannot be broadened overnight, said Gönner. One approach would be further cooperation to import raw materials.

Overall, Germany should expand partnerships with other regions of the world. These should be aligned more clearly with economic and security policy interests. Without mentioning China by name, it is said that the European Union needs a suitable toolbox to be able to take action against low-cost competition or excessive state subsidies from trading partners. Defensive measures would have to be deployed quickly to compensate for distortions of competition. ‌New instruments always have to be carefully ‌considered.

A more self-confident demeanor towards the USA

According to the BDI, a self-confident demeanor is also needed towards the USA, which under President Donald Trump has forced a trade agreement on the EU that is unfavorable for Europe. “In the event of protectionist US measures, European countermeasures must be examined without putting unnecessary strain on the strategic relationship.” According to experts, the strong concessions to Trump are due to the fact that the EU is too dependent on the USA in terms of security policy. New threats to the security situation would also have to lead to structural adjustments in companies.

The expenses for upgrading the Bundeswehr and modernizing the infrastructure, which are accompanied by high debts, would have to come from the normal budget again in the medium term. "The massive borrowing is only justified if it is accompanied by a more efficient use of public resources through reforms of state structures, the implementation of necessary structural reforms and the prioritization of expenditure."