China needs EU market more than the EU needs China, Berenberg economist says

Germany and in what is going on with its position regarding the EVs, the tariffs and China as well. Holger, how do you see the situation? Well, as we already heard, the German car industry needs China as a market. The German economy needs the car industry. So this is important. But what the visit of Harvard to China has apparently shown is that with China you need to negotiate tough, because after all, China needs the European Union, including very much Germany, as a market even more than we need China. So we in Europe do have one of the biggest, the second biggest market in the world to offer. And access to our market should only be for those who play by the rules. And that's what Havoc apparently told the Chinese. Is it the same old problem with Europe And we are low growth for a reason. In fact we're low growth for many, many reasons. When I look at the higher growth areas and those that are producing products quicker to market, whether it be EVs, whether it be Karen's domain, AI, whether it be technology, whatever. It may well be that we are overpriced in terms of our labour costs, over regulated, We have too much permitting problems. We don't have enough business friendly policies, including getting capital to the right place in a timely fashion. Are we trying to penalize the Chinese because we're just not good at getting the product to market in the same way that they do, in the same way that other global regions do? First of all, we definitely have many of the problems you mentioned over here including getting capital fast into growth areas. But as to the Chinese issue, it indeed is to a significant an issue that China is wasting money by throwing too many subsidies at selected high tech sector. They are buying market share successfully indeed, and that is partly at the expense of European, including very much German, producers. But as we also see, the Chinese economy is rather sluggish. So China's attempt to buy market share works in terms of being competitive in some areas, but it does not work in terms of bringing the Chinese economy ahead. So if we list all the problems of Europe, we could also say the Chinese are actually suffering more from their approach to industrial policy by wasting money. They should. Instead of having offered all these subsidies to producers, they should simply have let business getting on with finding the best market niches, not at the expense of huge subsidies and hence at the expense ultimately of what even in China does exist, the taxpayer.