Christian Lindner (FDP), Federal Minister of Finance, is on his way to a bilateral meeting with US Treasury Secretary Yellen at the World Bank headquarters.
Bernd von Jutrczenka | Alliance in pictures | Getty Images
German automakers do not have to fear competition from China and are still considered the best in the world, German Finance Minister Christian Lindner told CNBC.
“German cars are the best cars in the world, whether they’re internal combustion engine or electrified,” he told CNBC’s Karen Tso on Thursday on the sidelines of the IMF spring meetings in Washington, D.C. .
“German car manufacturers are among the world leaders, they do not have to fear Chinese competition,” Lindner said.
Competition in the electric vehicle, or EV, market in China and Europe, as well as the United States, has intensified in recent months. More and more Chinese companies are making progress in the electric vehicle space, and China’s BYD is in close competition with Tesla for the title of largest electric vehicle manufacturer.
China’s electric vehicle sector has seen substantial growth, sending a large quantity of vehicles to other markets, often offered at more accessible prices. These rapid developments have raised questions and concerns about China’s trade practices and policies in the United States and the European Union.
US Treasury Secretary Janet Yellen warned last month that China could use global markets as a dumping ground for cheaper clean energy products, including electric vehicles. That could depress market prices and put pressure on green industry elsewhere, Yellen said.
Yellen and European Commission chief Ursula von der Leyen called earlier this month for a tough stance against possible unfair competitive practices by China. The European Union has also launched an investigation into Chinese subsidies for electric vehicles.
China has denied any wrongdoing, with its Commerce Minister Wang Wentao saying any claims of “overcapacity” were baseless. China’s success in the electric vehicle sector is linked to “constant innovations” as well as “a well-established supply chain system and market competition”, rather than subsidies, he said. he added.
The US and EU concerns cover a range of green technology sectors, including electric vehicles, solar panels and lithium-ion batteries.
Lindner said Thursday that the potential dumping of Chinese products on global markets needs to be examined, as do fears that China is paying subsidies to producers who sell cars below production value.
“That would be unfair and we would then have to decide on the measures,” Lindner said. However, until now it was unclear whether China was actually following this dumping approach when it came to electric vehicles or other industries, he noted.
When asked what those measures might look like, Lindner said all options are on the table. This echoes comments from Yellen, who told CNBC earlier this month that she would not rule out any measures, including tariffs on Chinese exports.
The German government, however, has expressed reluctance about the tariffs, with German Chancellor Olaf Scholz’s spokesman saying he is skeptical about their necessity, according to Reuters.
This comes ahead of Scholz’s visit to China earlier this month, during which he warned against unfair trade and competition practices.
Even though there will eventually be Chinese cars in Europe, competition must be fair and there must be no dumping, overproduction or copyright infringement, he told students at China’s Tongji University. Shanghai, according to Reuters.
Lindner told CNBC on Thursday that China’s green technology exports also have benefits, such as “very cheap” Chinese solar components that have flowed into German markets.
“Private households in Germany benefit from these cheap components and our advantage, our competitive advantage lies in the system as a whole,” he explained.
cnbc
