In this file photo taken on Nov 6, 2020, a visitor experiences an IOLMaster 500 device at the booth of German technology enterprise ZEISS during the third China International Import Expo (CIIE) in Shanghai, east China. (PHOTO / XINHUA)

BERLIN - The German electrical industry on Monday warned the country's government against decoupling from China, stressing that the Asian country's market was "of paramount importance" for Europe's largest economy.

The resumption of political and business dialogue between Germany and China "is very important and also overdue," Wolfgang Weber, chairman of the Executive Board of the German Electro and Digital Industry Association (ZVEI), said ahead of consultations between the two governments.

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China is "by far the largest" supplier of electronic and electrotechnical products to Germany, the ZVEI said in a statement. It is also the German industry's most important export market together with the US and its second-largest location for foreign direct investment.

Power lines hang in front of an electrical pole during the official start-up of the new transformer station of the TEN Thüringer Energienetze GmbH, in Grossschwabhausen, Germany, Nov 1, 2018. (PHOTO / AP)

If Germany was to decouple itself from China economically, its gross domestic product (GDP) would drop by 2 percent, according to a recent study compiled by the Austrian Institute for Economic Research (WIFO) on behalf of the Foundation for Family Businesses

China has been Germany's most important trading partner for seven years in a row now. In the first quarter of 2023 alone, bilateral trade was worth 64.7 billion euros ($71 billion), according to the Federal Statistical Office (Destatis).

In the same period, Germany imported 86.0 percent of its portable computers, 67.8 percent of its smartphones and phones, and 39.2 percent of its lithium-ion batteries from China in terms of value, according to Destatis.

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German federal Minister of Finance Christian Lindner has also warned against decoupling from China. This would "not be in the interest of jobs in Germany. Others would take our place," he said earlier this year.

If Germany was to decouple itself from China economically, its gross domestic product (GDP) would drop by 2 percent, according to a recent study compiled by the Austrian Institute for Economic Research (WIFO) on behalf of the Foundation for Family Businesses. This would result in annual losses of almost 57 billion euros.

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China has become increasingly important for traders across Europe, overtaking the United States as the European Union's (EU) largest trading partner in 2020. With traded goods worth 696 billion euros, the country accounted for 16 percent of the bloc's total trade in 2021, according to official figures.

"A functioning trade between Europe and China is profitable for both sides," Weber said.