China’s zero-covid policy represents a major economic risk for Germany, the Association of German Chambers of Commerce and Industry (DIHK) said on Monday.
“The lockdowns that have now resumed as well as the increasingly protectionist economic policy are a major burden for German companies in China,” DIHK head of foreign trade Volker Treier told dpa in Berlin.
Many German companies are currently realigning their supply chains, he added. “More than a third of German companies in China are planning to expand and diversify their supplier networks outside the country.”
Companies are looking towards other Asian markets, Treier said.
“For many companies, however, doing without the Chinese market altogether is not an option,” he said, adding that Germany is heavily dependent on China for raw materials.
“Free trade agreements can help accelerate the process of diversification. But we need them not only with countries like Canada or New Zealand, but also with other important partners like Mercosur, Indonesia or India.”
Strict coronavirus policies have led to the biggest protests in Chinain decades. Beijing and other metropolises have seen hundreds of demonstrators take to the streets recently.