Experts from the Center for European Reform have warned Germany’s leadership of the impending threat of a significant industrial decline and rising unemployment due to Beijing’s aggressive economic expansion. Analysts are declaring the onset of a period referred to as "China Shock 2.0," drawing direct parallels to events from 25 years ago in the United States when a surge of cheap Chinese imports devastated entire cities in the American Midwest, resulting in the loss of over 2.5 million jobs and sparking a severe social crisis.
Statistics show a rapid deterioration in the situation for the leading economy in the European Union. China’s trade surplus with Germany doubled between 2024 and 2025, soaring from $12 billion to $25 billion, ultimately creating a total trade imbalance of $94 billion. Major hubs of Germany’s automotive and heavy manufacturing industries, including Wolfsburg and Stuttgart, are now at the highest risk. The situation is further exacerbated by Beijing’s initiative of “10,000 little giants,” aimed at directly displacing German small- and medium-sized enterprises from international markets.
The authors of the report criticize Berlin for its indecisiveness and urge the government to abandon its passive approach to the achievements of its eastern competitor. They recommend that Germany immediately transition to a robust economic offense and support French initiatives to protect European markets from the influx of Chinese products. The relevance of these warnings is further underscored by recent domestic indicators. According to a report from the Federal Statistical Office of Germany, the country experienced a sharp decline in employment, with a reduction of 486,000 jobs in the first quarter of 2026, representing over 1% compared to the end of last year.
