Germany urged to stop admiring Beijing and wake up to ‘China Shock 2.0’

Germany must stop admiring China’s success in the EU or it will sleepwalk into the kind of deindustrialisation the US experienced 25 years ago, a leading Brussels thinktank has said. With China’s surplus with Germany having doubled between 2024 and 2025 from $12bn (£9bn) to $25bn, creating a $94bn trade imbalance, the Centre for European Reform (CER) said Europe’s largest economy risked a repeat of what happened in the US in 2001 when a sudden surge in imports permanently hollowed out towns in the American midwest. “China Shock 1.0” not only led to losses of up to 2.5m jobs but was also marked by a rise in suicides, divorce and drug use in US towns that lost industries to the Chinese, according to the CER report. That fraying of the US social fabric, it said, was “an eerie warning shot for Germany’s car and machine-building cities like Wolfsburg and Stuttgart”, a reference to the homes of Volkswagen and Mercedes-Benz, two brands emblematic of German engineering and design success. “Germany remains hesitant, even as China has already eaten much of German industry’s lunch and is preparing to start on dinner,” said the CER. Entitled “China Shock 2.0: the cost of Germany’s complacency”, the thinktank report concluded: “Berlin cannot keep admiring the problem,” adding that the risk for Berlin was acute yet the German political leaders had “struggled to see the problem clearly”. China’s surplus with Germany doubled between 2024 and 2025 from $12bn (£9bn) to $25bn. …