Chinese companies are accelerating their development in industries such as automobiles and machinery. German exporters, who once had an advantage in the Chinese market, are facing increasingly fierce competition.
According to a report by the German Federal Foreign Trade and Investment Agency (GTAI) on October 28, Germany's trade deficit with the Asia-Pacific region this year is expected to reach nearly 146 billion euros (approximately 1.09 trillion yuan), setting a record high. Declines in exports to China have offset the sales growth of Germany in other markets in that region.
The report predicts that Germany’s exports to 29 major economies in the Asia-Pacific region will decrease by 3.2% this year, while imports will increase by 6.4%. China accounts for about half of Germany’s trade with the Asia-Pacific region, so its impact on the overall figures is significant. If China is excluded, Germany’s exports to this region are expected to increase by 2.8%.
The traditional advantageous industries in Germany have been particularly affected. In the first seven months of this year, German machinery exports to China decreased by 18%, and car exports fell by 30%. The report states that as Chinese domestic automakers expand their advantages in the field of electric vehicles and benefit from control over the battery supply chain, German car sales in China have nearly halved compared to the peak of over 5 million units.
The report also noted that Chinese companies are expanding the domestic production of advanced technology products, machinery, and electric vehicles. German exporters face greater challenges in this important overseas market.
As the report is being released, German Chancellor Merz is visiting Japan, South Korea, and Singapore. She is calling for strategic alliances between medium-sized nations in Europe and Asia in the fields of trade, technology, and security.
