Germany’s dependence on China — now its largest trading partner — makes it incredibly vulnerable as the communist state appears more and more likely to come to economic blows with the West.
Having already massively self-sabotaged its economy by getting itself addicted to Russian gas — which the belligerent state can turn off and on at will, and has — Germany is now in danger of further financial hardship as a result of making communist China its single biggest trading partner.
Germany, along with the rest of the European Union, is already looking like it is heading towards recession, with significant fears now emerging that millions of households could find themselves unable to pay for heating over the winter.
However, even with how bad things are now, a report from the country’s ifo Institut that things could still get a lot worse, with the research body predicting that the country’s strong economic ties to communist China could see the country lose billions of dollars in the event of a trade war.
According to the document published on Monday, such a trade war would cost the German economy billions of dollars, with the country’s automotive sector expected to take the biggest hit of any single German industry.
Ultimately, the body compares a trade war with China to the economic damage Germany is said to have suffered in the aftermath of Britain leaving the European Union, but considerably worse.
The study ultimately advises that Germany should look to tighten ties with “like-minded nations” such as the U.S. in order to “reduce one-sided and critical dependencies on certain markets and authoritarian regimes”, while the study authors implore the country not to abandon economic globalisation.
Should a trade war indeed erupt between the West and communist China in the coming months, it will be the second economic disaster to befall Germany this year as a result of poor foreign policy decisions.
The first of these disasters came to pass earlier this year in the form of Vladimir Putin’s war in Ukraine, something that has proven highly problematic for Germany due to its massive reliance on Russian energy exports.
With Russia having dramatically lowered the amount of gas it is supplying the central European republic, the country’s economy has begun to suffer significantly, with many both at home and abroad now fearing that much of the public simply will not be able to afford to heat their homes this winter.
Megalandlords in the country meanwhile have been attempting to wriggle out of minimum heating requirements in the country in order to save gas in the coming winter, with company bigwigs telling their tenants that a “warm blanket will probably be needed” this coming winter.
However, many of these tenants may end up being thankful if they end up being able to purchase gas at all, with German officials expecting there to be more acute regional shortages in the country over the winter, the overall impact of which — economically, socially and politically — being ultimately unknown for the time being.