China Reopening an Insignificant Factor for Germany So Far

Yesterday, we got our first look at December’s economic data for Europe, in the form of PMIs. It is also our first look at any data related to trade and the China reopening. In light of the reopening, lets delve into China’s number one European trading partner – Germany.

Germany exports the most goods to China of any European country by far. In 2021, the value of imports to China from Germany was just over $120 billion.

For a $4 trillion economy, this is significant exposure. With this in mind, German PMI should be the most sensitive of European PMIs to changes in trade with China.

Headlining the report: composite PMI came in at 49.7, slightly beating expectations of 49.6. Manufacturing PMI missed expectations of 48.0 at 47.0, which is where we would have expected to see the impact of the Chinese reopening. Services PMI, however, beat expectations of 49.5 at 50.4 – likely due to the mild winter Europe has experienced so far.