Federal Finance Minister Christian Lindner (FDP) is traveling to the World Bank headquarters for a bilateral meeting with US Treasury Secretary Janet Yellen.
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German Finance Minister Christian Lindner told CNBC that German automakers do not have to worry about competition from China and are still considered the best in the world.
“German cars are the best cars in the world, whether they’re internal combustion cars or electric cars,” he told CNBC’s Karen Tso on the sidelines of the International Monetary Fund’s spring meetings in Washington, D.C., on Thursday.
“German carmakers are world leaders and they don’t have to worry about Chinese competition,” Lindner said.
Competition in the electric vehicle markets in China, Europe and the United States has been heating up in recent months. A growing number of Chinese companies are making headway in electric vehicles, and China’s BYD has been vying with Tesla for the crown as the largest electric vehicle manufacturer.
China’s electric vehicle industry has grown significantly, sending large numbers of cars to other markets where prices are often more accessible. This rapid development has triggered questions and concerns from the United States and the European Union about China’s trade practices and policies.
U.S. Treasury Secretary Janet Yellen warned last month that China could use global markets as a dumping ground for cheap clean energy products, including electric vehicles. Yellen said that could depress market prices and put pressure on green manufacturing elsewhere.
Both Yellen and European Commission President Ursula von der Leyen earlier this month called for a tougher stance against potential unfair competition by China. The European Union has also launched an investigation into China’s electric vehicle subsidies.
China has denied any wrongdoing, and Commerce Minister Wang Wentao said any accusations of “overcapacity” were baseless. He added that China’s success in electric vehicles has to do with “continuous innovation” and “perfect supply chain systems and market competition,” rather than subsidies.
The U.S. and EU concerns span a range of green technology areas, including electric vehicles, solar panels and lithium-ion batteries.
Lindner said on Thursday that the potential for Chinese products to be dumped on global markets needs to be reviewed, as well as concerns about Chinese subsidies to manufacturers that sell cars below production value.
“It would be unfair, and then we have to decide what measures to take,” Lindner said. However, he noted that so far it is unclear whether China has actually adopted such dumping practices in electric vehicles or other industries.
Asked what those measures might look like, Lindner said all options were under consideration. That echoes comments from Yellen, who told CNBC earlier this month that she would not rule out any measures, including tariffs on Chinese exports.
However, the German government has been reluctant to impose such tariffs, with a spokesman for Chancellor Olaf Scholz saying he was skeptical they were necessary, Reuters reported.
This comes ahead of Scholz’s visit to China earlier this month, during which he warned of unfair competition and trade practices.
Reuters reported that he told students at Shanghai’s Tongji University that although Chinese cars would eventually enter Europe, competition must be fair and there must be no dumping, overproduction or copyright infringement.
Lindner told CNBC on Thursday that China’s green technology exports also have advantages, such as the influx of “very cheap” Chinese solar modules into the German market.
“Private households in Germany, they benefit from these cheap components and our advantage, our competitive advantage is the entire system,” he explained.
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