- German Finance Minister Christian Lindner told CNBC that German automakers don't need to worry about competition from China.
- “German cars are the best cars in the world, whether they're internal combustion engines or electric cars,” he told CNBC's Karen Tso.
- Tensions over China's green technology exports are rising as the EU and US express concerns about China's trade practices and policies.
German automakers don't have to fear competition from China and are still considered the best in the world, German Finance Minister Christian Lindner told CNBC.
“German cars are the best cars in the world, whether they're internal combustion engines or electric cars,” he told CNBC's Karen Tso on the sidelines of the IMF Spring Meetings in Washington, D.C., on Thursday.
“German automakers are world leaders and have no need to fear Chinese competition,” Lindner said.
Competition in the electric vehicle (EV) market has intensified in recent months, not only in the United States but also in China and Europe. More and more Chinese companies are making strides when it comes to EVs, with China's BYD in a tight race with Tesla for the top EV maker position.
China's EV sector is experiencing significant growth, with large volumes of vehicles being shipped to other markets, often at more affordable price points. This rapid development has raised questions and concerns about China's trade practices and policies in the United States and the European Union.
U.S. Treasury Secretary Janet Yellen warned last month that China could be using global markets as a dumping ground for cheap clean energy products, including electric vehicles. Yellen said this could drive down market prices and put pressure on green manufacturing elsewhere.
Yellen and European Commission President Ursula von der Leyen earlier this month called for a tough stance against possible unfair competitive practices by China. The European Union has also launched an investigation into China's EV subsidies.
China has denied any wrongdoing, and Commerce Minister Wang Wentao said any allegations of “overcapacity” were unfounded. He added that China's success in the EV field is related to “continuous innovation” and “established supply chain system and market competition” rather than subsidies.
The US and EU concerns cover a wide range of green technology areas, including EVs, solar panels, and lithium-ion batteries.
Lindner said Thursday that the possibility of Chinese products being dumped onto global markets needs to be considered, and that China may be paying subsidies to producers who sell cars for less than they are worth. He also expressed concern.
“This is unfair and we will have to decide what to do,” Lindner said. However, he pointed out that so far, it has not been made clear whether China is actually following this dumping approach when it comes to EVs and other industries.
Asked what those measures would be, Lindner said all options were on the table. This echoes comments from Yellen, who told CNBC earlier this month that she would not rule out any measures, including tariffs on exports to China.
But the German government in particular has been reluctant about such tariffs, and according to Reuters, a spokesman for German Chancellor Olaf Scholz said he was skeptical about whether tariffs were necessary.
This comes ahead of Scholz's visit to China earlier this month, during which he warned against unfair competitive and trade practices.
According to Reuters, he told students at Shanghai's Tongji University that Chinese cars would eventually come to Europe, but competition must be fair and there would be no risk of dumping, overproduction or piracy. He said that this should not happen.
Lindner told CNBC on Thursday that there are also benefits to China's green technology exports, such as “very cheap” Chinese-made solar components that are flowing into the German market.
“German households benefit from these inexpensive components, making the whole system our advantage and competitive advantage,” he explained.