Germany’s industrial export model is under intense strain as aggressive competition from Chinese manufacturers challenges European dominance. For decades, Germany built its economic power on high-value exports like machinery, automotive engineering, and industrial equipment. Today, Chinese firms produce comparable high-tech goods at significantly lower costs, sharply reducing German exports to China while Chinese products flood European domestic markets. This widening trade gap forces key industrial sectors across Germany to confront severe structural challenges, declining order volumes, and rising pressure on manufacturing jobs.

China shock puts Germany's economy under strain

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germany economic-strain-2026

China shock puts Germany's economy under strain