Mercedes-Benz CEO warns EU against protectionism with China

Ola Kaellenius

23rd February 2024 – (Berlin) Ola Kaellenius, CEO of Mercedes-Benz, has cautioned the European Union against adopting protectionist policies towards China, warning that such measures could have detrimental effects on Europe’s economic fabric. This sentiment aligns with the perspectives of numerous German enterprises, as reported by Reuters.

This stance is substantiated by a recent survey from the German Chamber of Commerce in China, which indicated that an overwhelming 78 per cent of German businesses project steady industry growth in China over the next five years. Notably, close to half of these companies expect annual growth rates ranging from 5 per cent to 20 per cent in their respective sectors within China. Larger corporations are particularly optimistic, with 90 per cent forecasting potential expansion for their industries.

Bosch Group, the technology and services giant, has reiterated China’s strategic importance as an innovation hub and key market. Despite facing challenges, Bosch China’s president, Xu Daquan, reported sustained robust growth in 2023. The company’s sales in China have increased by 5.2 per cent year-on-year, amounting to approximately 19.5 billion U.S. dollars, supported by nearly 58,000 local employees.

Bosch remains committed to consolidating its presence in China through continued investment, enhancing manufacturing and R&D capabilities, forging local partnerships, and improving customer service to drive further growth, Xu elaborated.

The German Economic Institute (IW) has further underscored Germany’s deepening economic ties with China, revealing that German direct investment in China climbed to a record 11.9 billion euros last year, a 4 per centGerman Industry Investment in China Soars, Reflecting Confidence Amid Caution on Protectionism increase from the prior year. German companies’ direct investment in China constituted a substantial 10 per cent of Germany’s total foreign investment in 2023. Over the last three years, the cumulative investment by German firms in China has matched the total investment seen in the six years from 2015 to 2020, highlighting the growing importance of the Chinese market for German industry.