Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

CEO of Germany's Merck: decoupling from China would be at huge economic cost

Published 06/06/2023, 06:10 AM
Updated 06/06/2023, 11:25 AM
© Reuters. FILE PHOTO: Merck KGaA CEO Belen Garijo, poses for a picture before speaking to the international club of journalists in Frankfurt, Germany, June 5, 2023.     REUTERS/Ludwig Burger

© Reuters. FILE PHOTO: Merck KGaA CEO Belen Garijo, poses for a picture before speaking to the international club of journalists in Frankfurt, Germany, June 5, 2023. REUTERS/Ludwig Burger

By Ludwig Burger and Patricia Weiss

FRANKFURT (Reuters) -The CEO of German technology group Merck KGaA said that unravelling trade ties with China would come at great economic cost and she was banking on dialogue to ease tensions between Beijing and Western powers.

Belen Garijo, the Spanish CEO of the German drugmaker and manufacturer of lab equipment and semiconductor chemicals, said late on Monday that dependencies between the powers were huge, speaking at a journalist club event in Frankfurt.

Over the weekend, a Chinese warship crossed in front of a U.S. destroyer in the sensitive Taiwan Strait, raising the prospect of future face-offs. But the two sides on Tuesday described meetings between senior U.S. and Chinese officials after the incident as constructive.

For months, U.S. and German lawmakers have called for a reduction in trade to cut dependency on China.

"When I hear politicians say we have to decouple, I don't think this is feasible ... it will take 20 years to decouple, and for what?" said Garijo.

"We are risking a global world that has brought wellbeing, more innovation, more collaboration."

Merck has said its roots in China go back nearly 90 years. Last year the country accounted for 3.2 billion euros ($3.4 billion) of 22.2 billion euros in group sales, with products including bioreactor gear as well as chemicals for making microchips and flat screens.

The company's finance chief last month said that Merck would further invest in China and would build domestic supply chains there to curb imports of key raw materials that could be disrupted in any trade row.

CEO Garijo said the company would look closely into "different scenarios on the basis of the potential escalation of the conflict", but such an escalation was not likely.

© Reuters. FILE PHOTO: Merck KGaA CEO Belen Garijo, poses for a picture before speaking to the international club of journalists in Frankfurt, Germany, June 5, 2023.     REUTERS/Ludwig Burger

German Economy Minister Robert Habeck in March suggested that Berlin could impose export restrictions on China to prevent Germany from losing its technological edge, and the government under Chancellor Olaf Scholz's is working on a strategy paper on China to be rolled out this year.

($1 = 0.9357 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.