Germany is facing growing pressure on its manufacturing sector as exports to China and industrial employment decline. According to the Centre for European Reform, exports to China from all major European economies except the Netherlands have fallen over the past five years, with Germany and Sweden recording some of the sharpest declines. Germany’s exports to China as a share of GDP fell from about 0.71 percent in 2022 to 0.48 percent in 2025. Jürgen Matthes of the German Economic Institute estimated that China-related exports supported about 1.1 million German jobs at their 2021 peak, but roughly 400,000 have since disappeared.
The employment losses have triggered growing labor unrest. On September 21, more than 175,000 workers joined a nationwide strike, disrupting production at more than 200 factories. Germany’s industrial sector is reportedly losing about 15,000 jobs per month. Volkswagen expects its 2026 revenue to fall by €6.9 billion from the previous year and plans to cut 50,000 jobs in Germany by 2030. Porsche reported a 16 percent decline in global vehicle deliveries in the first half of 2026, while auto-parts supplier ZF reported a €2.1 billion loss and plans to eliminate 11,000–14,000 German jobs by the end of 2028.
The broader EU-China trade imbalance has also widened. European Commission President Ursula von der Leyen warned on September 16 that the EU’s trade deficit with China had reached €1 billion per day and that the economic relationship was approaching a “tipping point.” Eurostat data showed an EU goods trade deficit with China of €359.8 billion in 2025, while the second quarter of 2026 alone recorded a deficit of €103 billion. Germany’s trade deficit with China reached €89.9 billion in 2025, while German exports to China fell another 14.5 percent in the first five months of 2026.
Analysts have described the trend as “China Shock 2.0,” with Chinese competition increasingly affecting Germany’s exports and domestic industrial production. MERICS economist Esther Goreichy said the pressure was hitting two major pillars of Germany’s economy—exports and industrial production. The report also highlights BASF, whose Ludwigshafen workforce fell below 30,000 for the first time since 1954, while the company has invested €8.7 billion in a large production site in Zhanjiang, Guangdong.
Source: Aboluo, September 28, 2026
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