Mon, 26 Jul 2021

BERLIN, June 15 (Xinhua) -- Germany should not seek to relocate production back to the country and should avoid state intervention in global supply chains, the German ifo Institute for Economic Research said on Tuesday.

A general return of supply chains to Germany would "result in huge revenue losses," said Lisandra Flach, director of the ifo Center for International Economics, in a statement. The country's economy would "benefit more than almost any other from open global markets."

Germany depends on the global supply chains as the country's gross exports include a 21 percent share of foreign value added. The figure for the United States is only nine percent, according to the institute.

At the same time, almost a third of German value added is exported, and the respective figure for the country's manufacturing sector is around 60 percent, the ifo said.

In 2020, most of Germany's exports went to the United States and China. Following the COVID-19 crisis, exports to China remained almost at the previous year's level, while exports to the United States fell significantly by 12.5 percent, according to figures published by the Federal Statistical Office (Destatis).

The sources of supply for the German economy should become more diverse internationally. "Achieving this calls for a deeper European Single Market and a stronger World Trade Organization," according to the ifo Institute.

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