Hyping 'China Shock' won't benefit Germany: China Daily editorial

The claim by Tanja Gonner, chief executive of the Federation of German Industries, or BDI, in a Monday report of Frankfurter Allgemeine Zeitung, that a "China Shock 2.0" "threatens" the entire German industrial system is a lamentable and deeply flawed example of scaremongering.

Reportedly, Germany is mapping out vulnerabilities in China's supply chain in order to use this information as leverage in a possible trade war with China.

Some Western politicians and analysts find it far easier to make China a scapegoat than to confront the real challenges festering at home — whether soaring energy costs, suffocating bureaucratic red tape, or the painfully slow pipeline from lab to market. If their real objective were industrial renewal rather than political point-scoring, they would not have overlooked the "China Opportunity 2.0" that proponents of the "China Shock 2.0" narrative have intentionally erased from the debate.

The experience of German businesses in China tells a very different story from Gonner's alarmist warnings. China reclaimed its position as Germany's largest trading partner in 2025, with a bilateral trade of 253 billion euros ($299 billion), up 2.7 percent from 2024, underscoring the depth of their economic complementarity.

The point was reinforced this February, when German Chancellor Friedrich Merz arrived in China accompanied by senior executives from dozens of Germany's biggest companies, visiting some of the leading Chinese technology companies in search of deeper industrial partnerships.

If German boardrooms truly believe the rhetoric of "China Shock 2.0" and the Merz government believes a trade war with China is unavoidable, they have a curious way of showing it.

German enterprises have long been beneficiaries of China's market and supply chains. The BDI must understand that the competitive pressure its members feel is a normal feature of a dynamic global market. Instead of advocating an assertive posture, it should encourage German companies to explore the very market that has fueled their growth and to tap into the opportunities created by China's 15th Five-Year Plan (2026-30) with an open mind.

If some German industries are still not convinced, they need not look any further than Volkswagen, which has adjusted its research and development strategy based on the success of its R&D center in China. This has accelerated the company's transition from "hardware-defined vehicles" to "software-defined vehicles". Just as Volkswagen recognizes China's EV success as an "opportunity" to be seized, the German government should abandon its unfounded allegations of "currency manipulation" and "overcapacity" and play a constructive role in China-European Union trade consultations.

For multinational corporations, partnering with China today means embedding themselves in a vibrant ecosystem of innovation. It means gaining access not just to market share, but to a dynamic environment for self-iteration, technological upgrading and the cocreation of next-generation solutions.

The real and present concern for the German economy is its own inertia. Many Chinese travelers returning from Germany remark that a country once synonymous with punctuality and precision no longer feels quite the same. Train delays and disruptions to urban transport have become commonplace, while China's high-speed rail and metro systems — once seen as playing catch-up — now operate with a level of speed, reliability and punctuality that is taken for granted.

Anecdotes are not data, but they often capture broader truths. The contrast serves as a reminder that Germany, like some other advanced economies, faces its own structural challenges and would benefit from a more sober assessment of its domestic transition rather than attributing every competitive setback to China.

None of this is to deny Germany's unique strengths. It remains a global leader in advanced machinery, chemicals, industrial automation, environmental technology and precision manufacturing. Chinese companies have long regarded their German counterparts not as rivals to be feared but as partners from whom much could be learned. If a technological gap is grounds for fear, then should China have labeled the arrival of German companies in the 1980s and 1990s a "Germany Shock 1.0"?

What some in Germany appear to find harder to accept is that, in a growing number of industries, the flow of knowledge between China and Germany has become two-way. In fields such as electric vehicles, digital infrastructure and aspects of advanced manufacturing, the former student has, at least in some respects, become a teacher.