This could get especially serious for Europe if it crushes the German mid-sized companies.
From Bloomberg via Malaysia's The Star, August 22:
German exporters face rising pressure from China in home market
German exporters are facing increasing pressure in their home market from Chinese exports to the EU, according to a study by the Cologne Institute for Economic Research.
Chinese exports to the region contain more and more sophisticated industrial goods -- such as machinery, pharmaceutical and automotive products -- which have long been considered the domain of German manufacturers.
According to the study, which was reported by Germany’s Welt am Sonntag newspaper, the share of such products within all EU imports from China rose from 50.7% in 2000 to 68.2% in 2019.
The figures serve as a warning for German politicians and companies, who are already facing mounting questions about the country’s future economic success.
The fabled German car industry is wrestling with the end of combustion engines and competition from the likes of Tesla, its tech industry lags behind European rivals, and manufacturers are fretting about the cost of the energy transition.
"With China, Germany is seeing strong export competition not only globally, but also in its own European home market,” Welt am Sonntag quoted IW economist Juergen Matthes as saying.
At the same time, China is turning more and more toward Germany’s economic model as a guide for its future success, according to some analysts. Beijing’s "Made in China 2025” programme, with its focus on increasing manufacturing in tech sectors, was inspired by Germany’s Industry 4.0 blueprint.
China’s recent regulatory crackdown has also drawn some comparisons with Europe’s largest economy....
....MUCH MORE
A decade ago when it became apparent the Chinese were buying German technology they couldn't copy, e.g. "The Invisible Hand Touches Germany in No-no Place: China Grabs Putzmeister" there was a hue-and-cry that the Mittelstand, the mid-sized companies which supply the export giants and upon which the entire system depends, were at risk. Seven years later the German powers-that-be were still worried about the takeover angle and not addressing the competition aspect of the Chinese threat:
"Wary of China, Germany plans rapid state intervention to protect key industries"
The German concern for their small and medium sized enterprises goes back quite a ways. Here's an old-timey pic via Wikipedia:
role of the Mittelstand in Walter Wilhelms
„Mission des Mittelstandes“ (Mission of the Mittelstand, 1925)
Without the Mittelstand you are without Germany's export engine and without exports (and with Mutti's recent comments on free speech, yikes!) you are left with a Teutonic Belarus.
But without the charm.
If interested see also: "China’s strategic investments in Europe: The case of maritime ports"
