EconPol Policy Briefs

EconPol Policy Briefs are short articles providing key findings of policy-related studies and policy implications from recent policy relevant economic research. Grounded in evidence-based insights, the Policy Briefs discuss current topics in economic and fiscal policy within a wide range of specific areas of expertise. By discussing implications of policy scenarios and the impact of economic policies in the face of the rapidly evolving challenges faced by the European economies and their global partners, EconPol Policy Briefs provide a well-founded economic policy advice to European policymakers. Focusing on key messages and policy conclusions, the Policy Briefs transfer expertise from researchers into the public debate and facilitate informed decisions.

Zeitenwende in German-Chinese Trade Relations?

Evidence from German Firms

Andreas Baur and Lisandra Flach

The Russian attack on Ukraine in February 2022 marked not only a turning point (Zeitenwende) for German security policy but also for German foreign economic policy. From a European standpoint, the war served as a painful reminder of how economic dependencies can be used as political leverage, bringing the geopolitical dimension of trade relations and economic interdependencies into public focus. In particular, economic ties with the People’s Republic of China are increasingly being scrutinized. The ifo Institute conducted a representative survey with German firms in February 2024 to assess changes in their reliance on Chinese inputs since the outbreak of the war and firms’ plans regarding their supply relationships with China.

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Reconfiguration of Supply Chains: What Are the Priorities of German Firms?

Cevat Giray Aksoy, Andreas Baur, Lisandra Flach, and Beata Javorcik

While eight out of ten German manufacturing firms reported material shortages at the height of the pandemic in December 2021, this share had fallen to 18 percent in October 2023. Nonetheless, the recent attacks by the Yemeni Houthi rebels on container ships in the Red Sea highlight the fact that supply chain risks remain significant.

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