„There is no reason for geopolitical tensions“
Mr. Consul General Huang, the Chinese economy is currently growing somewhat slower than the government’s target of 5%. Why is that?
We are currently facing some headwinds due to geopolitical tensions. As a result, foreign direct investment is lower than it could be, the demand for Chinese exports has decreased, and domestic consumption in China is weaker due to the uncertainty caused by the geopolitical situation. Additionally, the real estate sector in China is facing challenges.
The problems in the Chinese real estate sector – keyword Evergrande insolvency – have been widely reported in Germany. Why is the industry experiencing difficulties, and how does the government plan to address them?
In China, the real estate market was only opened to the market economy about 20 years ago. Since then, it has played a crucial role in boosting economic growth. However, compared to Europe and the United States, we still lack sufficient experience in market operations and risk management. Therefore, it's normal for the real estate market to experience fluctuations. In response to the problems in the real estate market, the Chinese government has introduced a series of measures aimed at curbing irrational market developments, and promoting the stable operation of the sector. Successfully – we are now seeing the first signs of a rise in real estate prices.
The Chinese government is currently enacting a series of measures to strengthen economic growth. How exactly is that supposed to work?
The recently introduced stimulus package focuses on five key areas: strengthening domestic demand, providing more support for businesses, improving the implementation of macroeconomic policies, boosting the capital markets, and, as previously mentioned, stabilising the real estate sector. The impacts are gradually becoming visible – not only in the real estate market. Recently, the sales of products such as cars, household appliances, office supplies, and home goods have increased. The business climate has improved significantly in both traditional and emerging industries, and the stock market has also noticeably recovered.
I no longer consider double-digit growth rates to be realistic.
Is it realistic for China to achieve growth rates of well over 5% again in the medium term, or are those times over?
The Chinese economy has grown strongly in recent years, bringing prosperity to many of the country’s residents. China is now the world's second-largest economy. A growth rate of 5% is roughly equivalent to the entire GDP of the Netherlands. Therefore, I no longer consider double-digit growth rates to be realistic.
China is facing strong headwinds from the new US administration. What economic consequences do you expect?
It is still too early to make a judgment. We need to wait and see what Donald Trump actually implements. But in principle, international cooperation is better for prosperity than protectionism.
The EU recently imposed tariffs on electric cars from China, citing China's massive subsidies for the sector. I assume you don’t understand this move.
No, not at all. There are over 200 companies in China that manufacture electric cars and compete with each other. These companies are not state-owned, and their success is not due to subsidies. Subsidies on that scale wouldn’t even be possible. These companies are successful because they have a lot of expertise and, unlike car manufacturers in Europe or the US, focus entirely on electromobility. They don’t have legacy burdens from the past. The same is true for Tesla, which is why it is leading in the US.
China does not want to be lectured or moralised.
Germany did not support the tariffs, but relations with China remain tense. What do you wish from the future government?
I wish that Germany would view China the same way that China views the Federal Republic. For us, Germany is not a rival, but a partner. We have similar interests, such as a commitment to free trade. There is no reason for geopolitical tensions. Germany and China do not share a common border. We have different political views in some areas, and that’s okay. However, China does not want to be lectured or moralised. We do not want interference in our domestic politics, just as we do not interfere in the domestic politics of other countries.
China is part of the BRICS alliance, which welcomed four new members this year. Do you expect the influence of BRICS in geopolitics to grow?
BRICS has become a symbol for the Global South, which demands to be better heard. BRICS does not seek to take a leading role in geopolitics. We want to promote the current system, with the UN, WTO, World Bank, and IMF as central organisations. But the Global South wants to have the influence in these institutions that it deserves due to its population and economic power. This demand is becoming louder, as shown by the fact that 40 more countries are currently interested in joining, and that there are now 13 partner countries with association agreements with BRICS.
Organisations like the WTO are criticised for having lost significance, and for the lack of progress in reforms to change this. Do you agree with the criticism?
The situation is challenging. Some countries are not willing to give up influence so that the Global South can have the influence it deserves. Nevertheless, organizations like the WTO remain important. They are the only places where all the countries of the world can come together and discuss important issues.
