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China Squeezes German Products in European Market

German newspaper Handelsblatt reports growing concern among German companies over rising competition from Chinese exports, not just in low-tech goods but increasingly in complex, high-tech products. A recent study by the German Institute for Economic Research found China’s share of EU imports in industrial goods such as machinery and autos is rapidly increasing, while Germany’s is declining. In 2000, China accounted for just 2.5% of EU industrial imports versus 17.7% for Germany; by 2022, China’s share grew to 13% while Germany’s declined to 15.5%.

Experts attribute China’s gains to generous government subsidies throughout entire supply chains as well as the country’s recent efforts to catch up on technology and innovation. In machinery, China’s EU import share grew from 6.8% in 2010 to 11.4% last year, while Germany’s share fell from 22.6% to 20.5%. The auto market could be China’s next target, with capacity to produce 40 million EVs annually, greatly exceeding China’s domestic demand of 20-25 million units annually.

Source: Deutsche Welle, August 15, 2023