China is becoming less of a customer and more of a competitor for German industry

China’s companies are increasingly taking market share from their German competitors, to Berlin’s increasing concern. Whether it’s chemicals, cars or industrial machinery, China’s share of the EU, ASEAN and Latin American markets relative to Germany has steadily increased.

And as Chinese firms move up the innovation ladder and match German sophistication with competitively priced products, German firms have had to look elsewhere for growth. Consider automakers such as Volkswagen: China now accounts for only about 5% of German motor-vehicle and parts exports, compared with around 13% in 2021.

Recent figures showed Germany’s trade deficit with China swelled to about 53 billion euros in the first half. Meanwhile, China has fallen from Germany’s second-largest export market in 2021 to ninth this year.