Despite all the kamikaze rhetoric emanating from London and Washington, the ability of the Western economies to actually decouple from China—and survive—is close to zero. The case of Germany is exemplary as was begrudgingly admitted in a new study issued by the private German Economic Institute (IW), which reported that the German economy became more dependent on China in the first half of 2022 than it had been in the past.
“The German economy is much more dependent on China than the other way round,” said Jürgen Matthes, who authored the study, which also called for a change in policy to reverse that trend. “Yet despite these dangers and problems, economic interdependencies with China have been moving in the wrong direction at a tremendous pace in the first half of 2022,” Matthes said.
German investment in China hit about €10 billion ($10 billion) in the first half of 2022, far exceeding the previous high of €6.2 billion. “The Chinese sales market and the profits beckoning there in the short term simply seem too attractive,” Matthes said.
