Germany urged to stop admiring Beijing and wake up to ‘China Shock 2.0’
Summary
A thinktank called the Centre for European Reform (CER) warned that Germany risks serious economic harm from its growing trade imbalance with China. The thinktank compared the situation to the past loss of U.S. jobs and industry due to Chinese imports and urged Germany to act before its manufacturing sectors, like car and machine-building industries, weaken further.Key Facts
- China’s trade surplus with Germany doubled from $12 billion in 2024 to $25 billion in 2025.
- The total trade imbalance between China and Germany reached $94 billion.
- The CER compared Germany’s situation to the “China Shock 1.0” in the U.S., which caused millions of job losses and social problems.
- Germany’s industrial centers, including cities with Volkswagen and Mercedes-Benz, face risk from Chinese competition.
- China has a policy called “10,000 little giants” targeting Germany’s middle-sized industrial companies (Mittelstand).
- The yuan might be undervalued by as much as 40% against the euro, making Chinese goods cheaper.
- The CER advises Germany to push for international action on China’s currency and trade policies with partners like France and global groups such as the IMF and G7.
- German leaders have mostly focused on issues like energy prices and bureaucracy instead of addressing the challenges from China.
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