Germany's exports to China plummeted by 6.6 percent in January and the Federal Statistics Office announced the decline could not yet be related to the coronavirus outbreak, as the impending effect of the health crisis threatens to push Europe's biggest economy into recession.
German factories rely on demand and supply chains from China, Germany's most important trading ally. Economists estimate the virus impact to appear in data from last month and drag the economy to contract in the first three months.
Germany's exports remained unchanged in January from December in revised terms and imports rose 0.6 percent for the current month, data form the statistics office showed. The numbers account for seasonal changes and calendar effects. Economists had projected a 0.7 percent drop in exports in adjusted terms, a survey conducted by the Wall Street Journal indicated.
The export figures follow strong data from Germany's industrial sector, with a strong recovery noted in industrial output and manufacturing orders. The country's trade excess - the balance of imports and exports of products - totaled $20.7 billion in seasonally adjusted terms in January, based on Destatis report. This is well above The Wall Street Journal's projections of 18 billion euro.
China has been a major market for products manufactured in Germany, with German exports to the country totalling 96 billion euros last year.
The United States maintained its ranking as a leading importer for the Germans, with imports worth around 118 billion euros, despite US President Donald Trump's protectionist stance on global trade.
France was Germany's second biggest importer, purchasing products worth 107 billion euros, followed by China. Germany's all-important car industry is heavily dependent on China, both as a market for vehicles and as a key player in the manufacturing chain.
The German factory segment had already contracted for six consecutive quarters prior to the coronavirus outbreak early this year, weighed down by international trade disputes and the Brexit drama.
An Asian powerhouse, China will remain as Germany's most lucrative country for vehicle production, a Deutsche Bank survey showed on Friday. In 2019, German auto companies rolled out more models in China than in Germany, at 5.09 million units compared to 4.66 million.
However, labeling the coronavirus problem as a "temporary shock," Deutsche Bank poll disclosed the risk to China's part in churning out German vehicles was not under any danger.
Next to France and Italy, Germany has the biggest number of coronavirus cases in the European region, and worries are growing about the health and economic impact of what looks to become a global pandemic.
