The 17th Asia-Pacific Conference of German Business opened on Sunday in Singapore with a focus on the need of diversification and stronger cooperation between Germany and the Asia-Pacific region for solving existing challenges.

The two-day high-profile meeting, with the participation of the German Chancellor for the first time on Monday, came at a time of global challenges, particularly geopolitical tension in Europe.

“The Russia-Ukraine war has changed everything, and new awareness arise that we have to be careful not to do business without thinking about the dependencies of supply chains of energy and raw materials and of trade,” said Vice Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck at the press conference on Sunday.

Habeck said Indo Pacific and Southeast regions were becoming more and more important in the past years and the German government was acting on its policy guidelines on the Indo Pacific region, which was adopted in September 2020.

“The guideline says Germany will strengthen the rule-based international order control and climate change, reduce unilateral dependencies in strategic areas through diversification and prevent future socio-economic crisis and to reaffirm the inclusive approach,” Habeck said.

He also announced negotiations on energy transition partnerships in the Indo Pacific of India, Indonesia and Viet Nam.

“For the future, I have to say that the German strategy is to diversify its trade relationship.”

Asia-Pacific is the most important non-European trade region for German companies.

According to current forecasts, Asia will contribute around half of global gross domestic product by 2050. The associated countries have also become much more important for the German economy at large.

According to UN Comtrade, the region accounted for 15 per cent of total German goods exports in 2021 – 6 percentage points more than in 2000. German exports to the region have recovered since the pandemic began in 2020 and are already exceeding pre-crisis levels, with more than 9 per cent more goods shipped from Germany to Asia-Pacific in 2021 than in 2019. Imports from the region are picking up even more strongly. In 2021, the value of German imports was more than 24 per cent higher than in 2019.

This makes Asian countries important sales and procurement markets as well as partners for Germany.

The European Union has already concluded free trade agreements with Japan, New Zealand, Singapore, South Korea and Viet Nam and negotiations for further agreements are ongoing, for example with Australia and India.

Besides being the most dynamic growth markets worldwide, Roland Busch, the chairman of the Asia-Pacific Committee of German Business (APA) and President and CEO of Siemens AG, pointed out three reasons making Asia-Pacific region be very important to German businesses.

All the mega trends in the world, from climate change, urbanisation, challenges with ageing society to localisation (local footprint on trade), are happening in this region. Technologies and digitalisation is the second important reason that offers great potential when it comes to address existing challenges.

“The third one is diversification,” Busch said, adding the pandemic had shown how difficult it was if we were too much dependent on one source and certain supplies and it’s time to look into the way how we can diversify market and elevate collaboration with the countries of this region to a new level.

“The fact that German Chancellor Scholz is attending our Asia-Pacific Conference underscores the importance of this event and the support for our work. After all, it’s only by joining together that we can add further depth to our partnership with the Asia-Pacific region, which is a key region for German industry and commerce,” Busch said.

The 17th APK meeting was the first in-person meeting after the digital edition in 2020 due to the COVID-19 pandemic. It attracted over 600 participants including key decision makers from the world of politics and business from both Europe and Asia-Pacific. This year’s edition focuses on key issues including the resilience of global supply chains, digitalisation, the promotion of green innovation and the opportunities available for diversification within the Asia-Pacific region.

The APK is jointly organised by the Asia-Pacific Committee of German Business (APA), the German Federal Ministry of Economics and Climate Action (BMWK), and the German Chambers of Commerce Abroad in Asia-Pacific. — VNS