Top trade partner, gateway to Europe

Companies from China showed their latest technologies at this year's Hanover IT exhibition in Germany. Zhang Fan / Xinhua

The important codependence between China and Germany was made all the more obvious by the global financial meltdown and eurozone crisis.

Germany is China's No 1 trading partner while China is Germany's third.

The bilateral trade relationship has borne the most fruit in the last five years.

Bilateral trade between the two countries reached $161.6 billion in 2013. At 28.9 percent the total between China and Europe, it is the largest share and greater than trade with the Netherlands and the United Kingdom combined. Those countries rank second and third.

And trade between China and Germany in the first five months of this year grew 12 percent compared to the same period last year to $69.7 billion.

Among all EU countries, Germany is alone with a mutually complementary economy to China. In recent years, China has become the major market of German automobiles and electronic products.

Mechanical, electronic and transportation equipment imported from Germany accounted for 70.5 percent of the total in 2013.

China was Germany's largest export destination for three years in a row from 2011 to 2013.

The country is also one of Germany's top five largest overseas markets of transportation equipment and the overseas market with a fastest growing auto sales.

Investment partner

Most of China's foreign direct investment from EU countries comes from Germany.

According to data from China's Ministry of Commerce, there were a total of 8,193 projects from German enterprises in China by the end of 2013.

Actual utilized investment from Germany reached $21.8 billion in industries including automobiles, chemical engineering, power generating equipment, transportation, steel and telecommunications.

According to a report from German Chamber of Commerce in China released this year, German enterprises in China are generally satisfied with the country's overall business environment.

Ninety percent want to expand their business in the country, 45.3 percent plan to increase investment, 46.5 percent view China as one of their top-three overseas markets and one-sixth believe that the country is the most important market in the world.

Germany has become the gateway to Europe for many Chinese enterprises, especially in the manufacturing industry.

According to the data from the Ministry of Commerce, China's investment in Germany from 2010 to 2013 grew 28.4 percent.

By the end of 2013, the value of non-financial direct investment from China in Germany was $3.9 billion with more than 2,000 Chinese enterprises and organizations in Germany.

According to a report from Germany Trade and Invest -a governmental department responsible for trade and investment - there were 139 new direct investment projects from China in Germany merely in 2013 and China was the third-largest source of foreign investment. Industries in Germany that appeal to Chinese enterprises include machinery manufacturing, electronics and telecommunication technologies.

Since 2010, the range of major Chinese enterprises that expanded investment in Germany including the nation's largest machinery manufacturer SANY Group, Beijing No 1 Machine Tool Plant and Shanggong Group. China's telecommunication giants Huawei and ZTE will resettle their headquarters for Europe in Germany.

New approach

As the second and fourth-largest economies in the world, China and Germany both enjoy a rapid economic growth.

The ups and downs of the financial crisis made the relationship between the two trading partners even more solid. In 2011, the first consultation by former premier Wen Jiabao and German Chancellor Angela Merkel opened in Berlin.

It has now become a new way to maintain China's relationships with foreign countries.

It solved problems in trading photovoltaic products in 2013.

This year, the two governments continue to place a priority on strengthening bilateral relations.

President Xi Jinping visited Germany in March and Merkel visited on July 6. A range of high-level officials from Germany have paid visits in the run-up to her arrival.

The increasingly frequent State-level visits continue to fuel trade development.

In addition to long-standing industry links in machinery manufacturing and infrastructure, the two countries look to cooperation in urban planning, new energy, environmental protection, pharmaceuticals, healthcare, and financial services.

The author Yao Ling is the deputy director of the Department of European Study at CAITEC of Ministry of Commerce.