Coronavirus in China Hinders Trade and Production in Germany
Sweeping coronavirus restrictions in China have negative consequences for the German economy, finds an ifo Institute survey. Approximately one in two companies affected by material shortages reported that the lockdowns currently in place in China have made the situation even worse than before. The sector most affected is wholesale (67.3 percent), followed by retail (63 percent) and manufacturing (53.7 percent). “Industries such as automotive and chemicals as well as manufacturers of machinery and equipment and of electrical equipment, which are closely intertwined with the Chinese economy, have been hit the hardest,” says Lisandra Flach, Director of the ifo Center for International Economics.
Companies surveyed frequently mention inputs such as chemicals, electronic components, and plastics. The percentage of affected companies is highest in the automotive industry at 82.6 percent; however, nearly all key industries are severely affected. “China is Germany’s largest trading partner for goods: in 2021, China accounted for 9.5 percent of Germany’s trade in goods. The results of a recent ifo Institute survey show that 46 percent of manufacturing companies rely on inputs from China,” Flach says.
