Germany to seek closer monetary ties with Japan amid offer chain tension

TOKYO (Reuters) – German Chancellor Olaf Scholz will touch down in Japan on Saturday with six of his ministers searching for closer monetary ties, as he considers lowering German dependence on Chinese raw supplies amid worldwide offer chain tensions.

Scholz and Japanese Prime Minister Fumio Kishida are organizing a “government consultation” involving several cabinet members from every single nations to go more than approaches to protected monetary security.

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

Supplied Japan’s passing of a bill on monetary security, Berlin hopes to find out its raw material strategy and take Tokyo’s cue on how to minimize dependency on imports, a German government official pointed out of the go to.

In a move largely focused at China, Japan’s parliament passed an monetary security bill final year aimed at guarding technologies and reinforcing important offer chains.

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

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

Japan is Germany’s second most significant 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-perfect predecessor and is exploring approaches to wean itself off China’s economy.

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