Germany is steadily losing export market share to China within the European Union, according to a report released Monday by the KfW Development Bank.
The report highlights that over the past decade, the export profiles of Germany and China have increasingly converged, particularly in key sectors such as automotive, mechanical engineering, and chemical products.
Chinese manufacturers have been expanding their market share across the EU at the expense of German exporters for the past 12 years, intensifying economic competition between the two countries.
"While Germany is losing export shares, China is making gains. In addition, the export profiles of both countries have been converging for years. They are competing in more and more product categories," the KfW report said.
Although Germany remains the leading exporter to other EU countries, its dominance is slowly eroding. In 2012, Germany accounted for 33% of EU imports, but by 2024, that figure had declined to 29%. Over the same period, China’s share rose from 1% to 4%.
In 2024, goods exported from Germany to other EU countries made up around 54% of its total exports, while goods from China accounted for 11% of the EU's imports.
"Various surveys among German enterprises have revealed that most of them expect the rivalry to further intensify with Chinese businesses," the report added.
The study also observed a shift in China's export structure, noting a significant decline in the share of labor-intensive goods. The proportion of domestically assembled items in China’s total exports fell from 55% in 2001 to just 20% in 2024.
"China is working to export its own excess capacity," said KfW Chief Economist Dirk Schumacher. "In this effort, Europe is now moving more into the focus of the People’s Republic because the conditions for selling in the United States are rapidly deteriorating," he added.
Schumacher emphasized that Germany must strengthen its competitiveness to face rising pressure not only from China but also from other global players. "It is critical for Germany to create a favorable business environment and make the economy competitive," he said.
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