Germany to seek closer financial ties with Japan amid provide chain tension

TOKYO (Reuters) – German Chancellor Olaf Scholz will touch down in Japan on Saturday with six of his ministers looking for closer financial ties, as he considers decreasing German dependence on Chinese raw components amid international provide chain tensions.

Scholz and Japanese Prime Minister Fumio Kishida are arranging a “government consultation” involving various cabinet members from each nations to talk about techniques to safe financial safety.

“As democracies and as very industrialized, export-oriented economies, Japan and Germany face equivalent challenges in shaping the digital and ecological transformation and strengthening the resilience of their economy in tricky geopolitical occasions,” Franziska Brantner, state secretary in Germany’s economy ministry, told Reuters.

Provided Japan’s passing of a bill on financial safety, Berlin hopes to discover its raw material method and take Tokyo’s cue on how to reduce dependency on imports, a German government official mentioned of the stop by.

In a move mostly focused at China, Japan’s parliament passed an financial safety bill final year aimed at guarding technologies and reinforcing vital provide chains.

Trade amongst Germany and China rose to a record level final year, producing the Asian nation Germany’s most vital trading companion for the seventh year in a row regardless of political warnings in Berlin about excessive dependence.

Goods worth about 298 billion euros had been traded amongst the two nations in 2022, up about 21% from a year prior to, according to information from the German statistics workplace.

Japan is Germany’s second biggest trading companion in Asia behind China, with volumes reaching about 46 billion euros in 2022.

Worried about Germany’s dependence, the centre-left government is now taking a tougher line towards Beijing than its centre-appropriate predecessor and is exploring techniques to wean itself off China’s economy.

(Reporting by Sakura Murakami in Tokyo and Riham Alkousaa in Berlin Editing by Alex Richardson)

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