Why Germany isn’t panicking over China
Germany is taking recent market volatility “very seriously,” but a finance ministry official told CNBC there was no reason to panic.
Jens Spahn, the parliamentary state secretary for Germany’s Federal Ministry of Finance, said Germany’s economy was relatively insulated from the global stock sell-off, despite its trade ties with China.“Germany is one of the biggest exporters in the world. Our car industry depends on what happens in China,” he told CNBC on Wednesday at the Handelsblatt Banking Summit in Frankfurt. “But we are not panicking because we have growing domestic demand and salaries. And so far, besides stock markets, we don’t see any impact [on the economy]-but we’re taking it seriously.” Global markets have faced extreme volatility over the past two weeks sparked by turmoil in Chinese stocks and fears over a slowdown in Chinese growth, following a raft of disappointing economic data. Thirty-five year-old Spahn, who is known as the right-hand man of Finance Minister Wolfgang Schaeuble, said the country was still expecting to see its economy grow 1.8 percent this year, despite concerns over both China and the dramatic Greek debt negotiations that took place earlier this summer.
In fact, Spahn said he was surprised by how well-positioned the Germany economy was at the moment.
“We are still wondering why we are doing so well as an exporter to the world when so many regions are in trouble,” he told CNBC.He said that recent labor market and pension reforms in Germany had made a major impact.
“We did a lot to get from the sick man of Europe that we were 10 years ago, to one of the growing economies in Europe,” Spahn told CNBC.
“So we think Germany is prepared as well for crisis.”