By Maria Martinez and Rene Wagner
BERLIN, March 30 (Reuters) – German companies are so deeply tied to both the United States and China that they cannot decouple from either without severe economic costs, according to a study by the University of Sussex and King’s College London seen by Reuters on Monday.
The researchers mapped sales, production and supply-chain exposures of firms listed on Germany’s DAX and MDAX indices, finding that dependence on the world’s two biggest economies runs across sectors and individual companies.
Automakers and machinery groups are most reliant on China as a market, while chemical and pharmaceutical firms depend more heavily on the U.S. for research, development and production, the study said. Digital, telecoms and semiconductor companies, meanwhile, are highly exposed to suppliers in both countries.
“Leading industrial players like Siemens and BMW were built in a fundamentally globalised system and can’t decouple from either China or the US without devastating losses,” University of Sussex political economist Steven Rolf, a co-author, said.
The study said BMW generates more revenue from China than from the United States, while also depending on Chinese battery supplier CATL for more than 1.4 billion euros ($1.5 billion) in inputs.
Siemens gets 24% of revenue from the United States and 12% from China, with supplier networks heavily exposed to both.
The findings underscore the difficulty for Berlin in crafting a clear strategy as U.S.-China tensions intensify, Rolf said.
(Reporting by Maria Martinez and Rene WagnerEditing by Ludwig Burger)
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