In Germany In Wake of the rise of China “Fears, and anxiety, and promotes not just rationality,” said Fuest. Thus, he refers to the rise of protectionism in the German industrial policy. Even if the Chinese benefited currently by the deprivation of foreign investors and the promotion of domestic companies, and so it is error, that you have to do the Same as China. “The Imitation of the Chinese industrial policy is a bad idea, because the level of economic development is different.” Germany moving to the technology frontier and a leading industrial nation. China to get there first, says Fuest. “The rise of China offers us more opportunities than risks,” Fuest sure.
Europe: pressure build-up, “with other countries to open markets”
“We need to keep a cool head and our interests are rational to pursue.” German interests were to “open China’s markets,” and not to close the German market to foreign investment. Nevertheless, the head of Ifo, compared to the “Handelsblatt in favour of”the worsening of the foreign trade act. His justification: “In the case of acquisitions, the state should always consider whether there is competition, there are political or security concerns.” However, this should be done on a European level. “The proposal is to act on the member States to coordinate their foreign economic policies at the European level, and not without consultation with the EU partners.” Europe needs to use its market power, “in order to build up pressure for other countries to open their markets further.” Clear intervention criteria stated Fuest important.
in order for Europe in the midst of the aggressive can keep economic policies of the Americans and the Chinese, calls for Fuest in the “Handelsblatt”, a “two-track course”. On the one hand, Europe should based try “the rule, multilateral world economic order and its institutions such as the WTO continue to develop, on the other hand, but also the ability to act, to demonstrate, if other countries threaten the EU with protectionism.” The European States could only be successful if they acted together.
government guarantee for large companies is “unacceptable”
Addressed to the “national industrial strategy,” says Fuest, that it is “unacceptable” to give big companies such as “Siemens” or “ThyssenKrupp” a state guarantee of existence. In his opinion, the industrial policy had three basic problems: firstly, politicians are not more experienced than private investors, whether technologies are at a site for the future or not. Secondly, politicians are the worse to terminate unsuccessful projects in a timely manner. And thirdly, politically influential companies can easily enforce privileges at the expense of competitors and taxpayers. Industrial policy should intervene, in his opinion, “where there is market failure and government interventions to bring about improvement.”
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