Germany's economy sounds the alarm: record deficit in trade with China!

Germany's economy sounds the alarm: record deficit in trade with China!

The German economy is facing an alarming trade deficit with China, which reached record levels in 2024. According to information from THE MIRROR The trade relations between Germany and China have changed significantly in recent years. While China was once Germany's most important trading partner, the USA has taken over this position in 2024.

Last year, Germany imported goods worth around 156.2 billion euros from China, while exports to China amounted to around 89.9 billion euros. This imbalance is clearly reflected in the trade balance: Germany recorded a deficit of around 66.3 billion euros. These developments are particularly worrying given that the total volume of foreign trade between both nations was approximately 246.1 billion euros in 2024, representing a significant decrease compared to previous years.

Decline in exports and imports

Although trade relations between Germany and China have grown continuously, current statistics show a worrying trend: in 2023, German exports to China fell by around 7.6 percent, while imports only fell minimally by 0.4 percent. This indicates a potential imbalance that could be detrimental to the German economy. The automotive industry in particular, which traditionally plays an important role in exports, could be affected by these developments.

The punitive tariffs on electric cars from China imposed by the EU Commission in 2024, which also found support in Germany, represent an additional challenge. These measures are part of efforts to protect our own industry and create fairer trading conditions.

The future perspectives

However, Germany's position in global trade does not only depend on active trade relations with China. In 2024, China defended its title as the world's largest export nation and relegated Germany to third place in this global competition. Given these key data, a deeper analysis of the situation offers valuable insights. China is the second largest nation in terms of imports, while Germany takes third place. The capital stock of Chinese direct investment in Germany amounted to approximately $54.2 billion in 2024, but a decline in annual direct investment from China has been observed since 2020.

German companies also face challenges such as the need to establish joint ventures in China, which complicates the underlying business models.

In summary, it can be said that economic decoupling from the Chinese market could have far-reaching consequences for Germany. According to an analysis by the Ifo Institute, relocating German production facilities would result in an estimated GDP loss of around 9.7 percent, while China would only suffer a loss of 0.7 percent. The future of German-Chinese trade relations is being watched with excitement, given the dependencies that both nations have on each other and which have a significant impact on their respective economies.