FX.co ★ Germany faces risks from exposure to China

According to a study by Union Investment, nearly a quarter of German companies have become dependent on China. Analysts are brainstorming ways for Europe's largest economy to get rid of this dependence. Union Investment analysts believe that Germany is more dependent on China than other countries. They emphasize that "no other country, not even China's direct neighbors such as Japan and South Korea, has so many large companies with high exposure to China." Meanwhile, the excessive reliance of German firms on demand from the Asian nation is a concern for analysts and market participants. In their study, Union Investment analyzed nearly 2,000 firms and enterprises worldwide. They concluded that German business is currently "critically vulnerable" to China. The study found that almost 25% of all companies in Germany are under the economic influence of China. Representatives of the Bundesbank had previously warned about the excessive dependence of Europe's largest economy on China. The regulator called for a reassessment of China's growing influence in Germany amid growing geopolitical risks. At the same time, it discouraged German companies from investing large sums in China's economy.