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Mitigating dependency: Germany’s drive for de-risking in China policy

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The concept of de-risking in Germany’s China policy highlights the need to reduce dependence on imports from China, but a recent study by the German Economic Institute suggests that little tangible progress has been made in diversifying procurement markets. The study identifies key product groups, including chemicals, pharmaceuticals, electronics and raw materials, where Germany remains heavily reliant on Chinese imports.

To effectively implement de-risking measures, the German government is advised to conduct a comprehensive risk analysis. This entails identifying critical products that are indispensable and cannot be readily replaced, as well as gathering information on potential substitutes and alternative suppliers. However, acquiring such data may be challenging due to the sensitive nature of business secrets. To address this, the IW suggests establishing a task force dedicated to obtaining relevant information from companies under strict confidentiality.

By conducting thorough risk assessments and engaging with industry stakeholders, Germany can better understand and mitigate the vulnerabilities associated with its dependence on Chinese imports. This proactive approach is crucial for enhancing resilience and safeguarding against disruptions in the global supply chain.

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