Behind a 90-billion trade deficit: China’s exports are no longer socks, but the engines of “Made in Germany”

The new face of "Made in China"

It has been reported that in 2025 China ran a record trade surplus with Germany of roughly €90 billion, and the composition of those exports explains why Berlin is uneasy. The shock isn’t cheap toys and socks anymore. Over the past decade and a half Chinese shipments to Germany have shifted decisively toward machine‑electrical goods and industrial inputs — the very components that keep German factories running.

According to Chinese customs data, machine‑electrical products accounted for about 70.8% of China’s exports to Germany, reportedly totalling some ¥1.07 trillion. Overall, industrial goods now make up roughly 70–80% of what China sends to Germany, while consumer goods such as clothing and household items have fallen to 15–25%. The result: a deepening “China‑shock” in sectors Germans once assumed invulnerable.

Who is driving the change — and why it matters

Chinese industrial champions are the visible face of that shift. Companies such as Midea (美的集团), which expanded into robotics in part through its acquisition of KUKA, Estun (埃斯顿), telecommunications giant Huawei (华为) and heavy‑equipment maker Sany (三一重工) are all active in Germany. In passenger EVs, BYD (比亚迪) has made a splash — according to Germany’s Federal Motor Transport Authority (KBA) it sold 2,629 new cars in January, a steep year‑on‑year rise — while SAIC (上汽), NIO (蔚来) and XPeng (小鹏) are also expanding. Upstream, battery maker CATL (宁德时代) is reportedly supplying 30–40% of batteries used by EVs in the German market.

Those shifts show why traditional German exports to China — cars, metal products, chemicals and machine tools — have cooled: a German Economic Institute (IW) analysis shows year‑on‑year declines exceeding 9% in many of those categories even as imports of the same product types from China rose. Is this just competition on price? German commentators point to subsidies, currency moves and state industrial policy, but many economists in Germany are also asking a tougher question: have German firms simply lost ground in the race to electrify and digitize?

Geopolitics, supply chains and policy responses

The political stakes are high. Germany sources roughly 65–70% of its rare earths from China — materials essential for EV motors, wind turbines and semiconductors — creating real supply‑security concerns if relations sour. In response, Berlin is reportedly pushing diversification strategies (sourcing from Southeast Asia and India), strategic stockpiles and tighter screens on Chinese investment in critical infrastructure and telecoms. Trade frictions and debates over “unfair competition” are increasingly framed in geopolitical terms: sanctions, subsidies and industrial policy now matter as much as unit costs.

Short term, China’s scale, clusters and integrated supply chains make full substitution difficult. Long term, Germany faces a strategic choice: double down on irreplaceable high‑end capabilities and brand‑led value, or try to rebuild resilience by reducing dependency on Chinese inputs. Which path will preserve German industrial clout — and can it be done without fragmenting global trade?