Germany Faces Increasing Competition from China in EU Export Markets, KfW Research Finds

Germany Faces Increasing Competition from China in EU Export Markets, KfW Research Finds

(IN BRIEF) KfW Research’s latest study reveals that Germany is facing increased competition from China in EU export markets. While Germany still maintains higher export shares than China in most product categories, its lead is shrinking, with China expanding its footprint in sectors like automotive, mechanical engineering, and chemical products. The study emphasizes the need for Germany to improve its business environment to remain competitive amidst the rising pressures from China and other nations.

(PRESS RELEASE) FRANKFURT, 28-Apr-2025 — /EuropaWire/ — Competition between Germany and China in European Union markets is intensifying, with Germany losing export shares and China making significant gains. A new study by KfW Research reveals that the export profiles of both countries have become more similar over the years, with both nations now competing in a growing number of sectors, including automotive, mechanical engineering, and chemical products. While Germany still holds a higher share in many of these product categories within EU markets, its lead is shrinking.

Dr. Dirk Schumacher, Chief Economist of KfW, noted, “China is working to export its excess capacity, and Europe is increasingly becoming a focal point for China, particularly as conditions for selling to the U.S. rapidly deteriorate.”

The findings highlight that, despite Germany’s historical dominance, the country’s share of exports to the EU has been declining. For example, in 2012, Germany accounted for around 33% of the total EU imports, but by 2024, this figure had dropped to 29%. Meanwhile, China’s share grew significantly, from around 1% in 2012 to 4% in 2024. This trend is particularly evident in the automotive, mechanical engineering, and chemical sectors, where Germany has seen a reduction in market share, and China has expanded its presence.

To counter growing competitive pressure from China and other countries, Germany must create a more favorable business environment and strengthen its economy, according to KfW’s analysis.

Media Contact:

Ms. Nina Luttmer
+49 69 7431 41336
nina.luttmer@kfw.de

SOURCE: KfW Development Bank