Germany’s economic relationship with China is spiraling into unprecedented territory, with the nation’s trade deficit poised to reach a record high, according to calculations by the Institute for Economic Research (IW Köln) and reported in “Welt am Sonntag”. Preliminary figures for the first three quarters of 2025 reveal a deficit of €63.1 billion, matching the previous record set in 2022, which was triggered by a unique import surge.
This sharp deterioration reflects a significant downturn in German exports to China, which plummeted to €61.4 billion during the same period – the lowest level recorded in at least seven years. Simultaneously, imports from China have surged to €124.5 billion, exacerbating the imbalance.
The trend is expected to persist into the final quarter of the year, offering little prospect of a rebound for German exports. “There is little hope that exports to China will rise again sustainably” cautioned Jürgen Matthes, a trade expert at the IW Köln. This stagnation raises serious questions about the long-term viability of Germany’s reliance on the Chinese market and the efficacy of current trade strategies.
Matthes’ assessment carries considerable weight, prompting calls for a more assertive approach from the European Union. He argues that the EU must proactively safeguard domestic industries and export interests, implementing measures to offset what he describes as “distortive competition” originating from China. This stance suggests a growing recognition within German economic circles that a purely market-driven approach is insufficient to counter China’s state-supported industrial policies and potential unfair trade practices. The debate is intensifying on how to balance the economic benefits of the Chinese market with the imperative to protect European industries and maintain a level playing field, potentially signaling a shift towards a more protectionist and strategic trade policy in the coming years. The implications for German industry, particularly in sectors like manufacturing and automotive, are considerable and demand a reassessment of Berlin’s economic relationship with Beijing.
