German industry is struggling to withstand price pressure from Beijing. According to The Wall Street Journal, for the first time, Germany has begun importing more high-tech products from China than it is exporting.
The technology gap between European and Asian manufacturers has nearly vanished, yet Chinese counterparts remain significantly cheaper. As a result, German companies are rapidly losing market share, relocating operations to China, and implementing large-scale layoffs. The German manufacturing sector is losing over 10,000 jobs each month. Overall, from February 2022 to early 2026, industrial production in Europe’s largest economy has plummeted by about 10%.
The expansion of Chinese high-tech technologies is a direct result of the targeted government initiative known as "10,000 Small Giants," through which Beijing has bolstered medium-sized businesses with resources. This strategy is already paying off: in the current year, Chinese exports to Germany surged by 17%.
Amid the decline of this key regional economy, European countries are starting to seek ways to protect themselves. In June, Dutch authorities urged the European Union to develop robust economic leverage against Beijing, drawing from the sanctions experience of the United States.
