Germany is the largest economy in Europe and now home to the euro zone’s first renminbi clearing bank. Its economic relations with China have a long tradition and are continuing to grow steadily. China is currently the fifth largest export market for Germany and Germany is also the second largest supplier of goods and services for China. In short, Germany is by far China’s most important trading partner in Europe.
The bilateral trade volume between Germany and China amounted to around 140.6 billion euros in 2013. This figure corresponds to that of Italy, France and Great Britain combined.
The fact that this is only a snapshot, a momentary state of how things stand between the two countries, was made clear by last year’s conference on the internationalisation of the renminbi in Frankfurt. Up to now, just under ten percent of Sino-German trade has been conducted in the currency renminbi. The opportunities for expansion that exist for all parties concerned are apparent from a glance at the figures from the transaction service Swift: in September 2013, 14.1 percent of the payments between China and Germany were denominated in renminbi, compared to 8.2 percent in May 2013 and a mere 2.4 percent in May 2012. According to an estimate from Frankfurt Main Finance, this proportion could rise to around 30 percent in the future.
Unlike other financial centres, the financial location of Frankfurt has always maintained close ties to the real economy. The financial capital has always pursued its key task of bringing together long-term capital needs and long-term investment needs to support the objective of growth.
As the headquarters of the European Central Bank and the Deutsche Bundesbank, the German Central Bank, Frankfurt highlights its international monetary and currency policy significance on a day-by-day basis. In addition, the financial centre is also the base of other important institutions such as the European Systemic Risk Board, the German Federal Financial Supervisory Authority (BaFin), and the bank and insurance supervisory bodies for the euro area (SSM and EIOPA). The presence of the Deutsche Börse stock exchange completes the list of merits of Frankfurt as the financial powerhouse for the euro area.
In a globalised world, the free and open exchange of goods, services and capital is crucial. The latter is more than obvious in Frankfurt am Main: of the more than 280 international financial institutions in Germany, 223 have settled in the Frankfurt/Rhine-Main Metropolitan Region, 197 of which are directly located in Frankfurt. 500 Chinese companies have set up their headquarters in Frankfurt, which is significantly more than half of all Chinese companies resident in Germany.
The establishment of an RMB Centre in Frankfurt is a further milestone in a successful collaboration.