Berlin, Germany (Weltexpress). Economic relations between Germany, which is being bullied by Brussels, and China are facing a decisive turning point. What was once considered a fruitful partnership has turned into an arena of increasing tension.
The structure of German-Chinese trade relations, once characterised by massive exports of European high-tech products to the ‘Middle Kingdom’, has been turned upside down in recent years. The same applies to the EU as a whole: in the first half of 2025 alone, the EU’s trade deficit with China rose to over 300 billion euros, a record figure that underscores the continuing imbalance. Germany, as the largest industrialised country in the European Union, is particularly affected by this. The German deficit with China rose by 142.8 per cent to 17.4 billion US dollars in the first eight months of the year, compared to 7.2 billion in the previous year. These figures are based on the latest customs statistics from Beijing and signal not only economic shifts but also geopolitical risks.
The reverse China-Germany car export
For a long time, China was a ‘gold mine’ for German car manufacturers. Brands such as Volkswagen, BMW and Mercedes-Benz dominated the Chinese market, where European premium vehicles were considered a symbol of quality and status. But in 2025, the tide turned. German car exports to China slumped by 43.9 per cent to just $4 billion in the first nine months, down from $7 billion previously. Automatic transmissions fell by 12.9 per cent, other car parts by 32.3 per cent. Total machinery exports slumped by 16.2 per cent, control instruments by 25.5 per cent.
China’s transition to electric vehicles (EVs) and plug-in hybrids (PHEVs) has strengthened domestic manufacturers such as BYD, which are expanding globally thanks to quality and unbeatable prices. European combustion engines, which were dependent on Chinese demand, are losing ground. At the same time, imports of Chinese PHEVs into the EU are exploding: in the first nine months of 2025, deliveries rose by 439.4 per cent to 2.8 billion US dollars – circumventing EU anti-subsidy tariffs, which only apply to pure EVs and not to PHEV hybrid vehicles.
Imports of lithium-ion batteries from China, which are essential for the European e-mobility revolution subsidised with many billions of euros, grew by 36.6 per cent; Germany’s imports alone amounted to over 9 billion US dollars, Bulgaria’s to more than half a billion (an increase of 860 per cent). But sales of finished German electric vehicles are stagnating.
In an interview with Reuters, car analyst Gregor Sebastian of the Rhodium Group explained that China’s own hybrid boom had led to a flood of new, attractive models that were now being exported. Consumers in the EU prefer hybrids because of range anxiety, and these have become even more attractive due to the recent relaxation of EU emissions regulations. As a result, Europe’s dependence on Chinese technology is deepening. Meanwhile, German carmakers such as Mercedes CEO Ola Källenius are calling for the strict phase-out dates for combustion engines set by the EU to be relaxed. ‘The rigid CO₂ targets must be adapted to reality,’ he recently emphasised, according to Reuters.
The German export engine is groaning and stuttering
This dynamic is hitting German industry hard. The automotive sector, which accounts for 19 per cent of German GDP, has lost over 112,000 jobs since 2019, almost half of them in the last twelve months. Exports to China, once the second-largest market, have fallen by 14 per cent and now rank sixth. China’s ‘Made in China 2025’ strategy – long ranges, quality workmanship, attractive designs, low prices – has intensified competition, while German manufacturers struggle with high energy costs and bureaucratic hurdles imposed by the federal government.
Germany’s lustre as a traditional European export engine has faded rapidly in recent times. Against the backdrop of the anti-industry economic policies of the last and current federal governments, this collapse was as certain as ‘Amen’ in church. Starting with the ‘green’ madness of the misguided so-called ‘energy transition’, through the sanctions policy driven by irrational hatred of Russia (which mainly hurts Germany itself and not Russia), to unconditional submission to US trade and customs dictates, which Berlin is also demanding punitive tariffs against China (which would be tantamount to a breakdown in trade relations with China) – one disaster followed another, with a mutually reinforcing effect.
Ironically, in German export statistics, the two items ‘smelted gold’ and ‘medicines’ have replaced cars as Germany’s largest export item to China, even though there have been no gold mines in Germany for ages. Of course, the export of precious metals cannot replace the traditional exports of Germany’s core industry. These serious structural changes are obvious and probably cannot be reversed.
The pressure on the automotive industry in particular is enormous. As is usual in such cases, its representatives are calling for protective tariffs on Chinese hybrid cars, as well as subsidised investment in battery production, a technology in which the Chinese are already global leaders, both technologically and in terms of price. Therefore, the Europeans’ hope of at least being able to export more to India or South America is built on sand.
