CHINA IS SUCKING THE LIFE OUT OF GERMANY.....

Cyrus Jansen looks at the problems confronting Germany and why German companies are going to China...once the powerhouse of Europe it is in serious trouble.

'Most of Germany’s largest brands rely heavily on China for both manufacturing and the Chinese consumer market. Without securing any type of alternative agreement between the two countries, Germany’s biggest firms, and by extension the country’s entire economy, face a lose-lose dilemma. Reshore production to aid Germany’s industrial downturn, or stay in China to save their brands. Returning home would cost them their Asian market and mean surrendering to more efficient Chinese rivals. Staying in China preserves their brands by leveraging local talent, supply chains, and consumers, but further weakens German manufacturing. Confronted with this dilemma, German companies have overwhelmingly chosen the latter.

A recent report from Bloomberg titled “Germany Is Just Making Too Much Money in China to Back Away Now” highlights the massive disconnect between the government’s desire for a return home and the decisive economic reality that firms must stay in China to survive. Volkswagen announced late last month that it would make an electric vehicle entirely in China for half the price it could elsewhere. From autos to chemicals, the country’s biggest exporters are ignoring government pleas and pouring billions into new projects that tie their fortunes even more tightly to the world’s second-largest economy. German corporate investment in China jumped €1.3 billion ($1.5 billion) between 2023 and 2024, hitting €5.7 billion, according to the Mercator Institute for China Studies.



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