Sino German trade is expected to reach new heights

The German Federal Statistical Office recently released data showing that China will surpass the United States and become Germany's largest trading partner again in the first eight months of 2025. Data shows that from January to August, the total import and export volume between Germany and China reached 163.4 billion euros, while the trade volume with the United States was 162.8 billion euros. This change may seem insignificant, but it to some extent reflects a subtle adjustment in the global trade pattern, highlighting Germany's vulnerability and adaptability as an export-oriented economy in a multipolar world.

Behind this replacement is the result of multiple intertwined factors. Since 2025, the tariff measures implemented by the United States have had a huge impact on the German economy. The European Union and the United States reached an agreement at the end of July that, starting from August 1st, the United States will impose a 15% tariff on most EU exports to the United States, directly affecting the export competitiveness of traditional advantageous industries such as German automobiles, machinery, and chemical products. Dirk Yandula, President of the German Wholesale and Foreign Trade Association, stated that the US tariff measures are the key reason for the decline in German exports to the US, as the demand for traditional export goods such as German cars, machinery, and chemicals in the US market has significantly decreased. Data shows that in the first eight months of this year alone, Germany's exports to the United States decreased by 6.5% year-on-year; Among them, the year-on-year decline in August was as high as 20.1%, reaching the lowest level since November 2021. Faced with the compression of profit margins, many German companies have had to reduce their business scale in the US market or postpone investment plans.

At the same time, the Chinese market has remained stable for a long time. China continues to promote new industrialization and green transformation, and the demand for high-end equipment, automation systems, new energy equipment and other products is constantly increasing. These are precisely the advantageous areas of German manufacturing. German automobiles, machine tools, chemicals, photovoltaics, and environmental protection equipment still maintain high competitiveness in the Chinese market. China is firmly committed to promoting high-level opening up to the outside world, which has also provided clear policy expectations and development space for foreign-funded enterprises. For German companies, China is not only an important export destination, but also an important partner for industrial cooperation and technology investment.

Germany's adjustment of regional trade structure is also one of the key reasons. After the US market was restricted, German companies placed greater emphasis on cooperation with internal Europe and emerging economies, strengthening industrial chain synergy with Central and Eastern Europe and Southeast Asia, and reducing dependence on a single market. This trend is particularly evident in the context of global supply chain restructuring. While Germany is striving to diversify risks, China, with its vast market size and complete industrial system, has provided a stable pivot for Germany's exports.

The changes in trade patterns reflect the fatigue of Germany's domestic economy. In recent years, the German economy has been continuously in a slump. The Gross Domestic Product (GDP) will decline by 0.3% in 2023 and another 0.2% in 2024, making it one of the few major economies in the eurozone to experience negative growth for two consecutive years. The intertwined problems of declining manufacturing orders, high energy prices, weak consumption, and insufficient infrastructure investment have put Germany at risk of stagnant growth.

The automotive industry, which Germany has always been proud of, has also been deeply mired in crisis in recent years. Since 2025, the German automotive industry has experienced a significant decline in profits: Volkswagen's operating profit for the first three quarters was 5.4 billion euros, a year-on-year decrease of 58%, of which the operating loss for the third quarter was 1.3 billion euros; Porsche's operating profit in the first three quarters plummeted by 99% year-on-year, from 4 billion euros in the same period last year to 40 million euros; Mercedes Benz's net profit for the first three quarters was 3.88 billion euros, a decrease of half year-on-year. Even more severe is job loss. According to the latest analysis report by consulting firm Ernst&Young, from June 2024 to June 2025, the German automotive industry will experience a net loss of approximately 51500 jobs, accounting for nearly 7% of all positions and becoming the most severely affected industrial sector.

For a long time, the core driving force of the German economy has come from exports. However, when external demand weakens and trade barriers rise, this model exposes obvious vulnerability. The imposition of tariffs by the United States has put pressure on German exports, while the rise of Asian manufacturing has posed competition to Germany in some mid to high end manufacturing sectors. In this situation, Germany not only faces the challenge of weak external demand, but also must seek new directions for industrial upgrading.

In this context, China's re emergence as Germany's largest trading partner is not only an economic outcome, but also a strategic signal. For Germany, the stability and scale of the Chinese market provide a buffer for its exports, offsetting some of the impact from the United States; For China, Germany's technological advantages, industry standards, and market experience are valuable resources for promoting its own high-quality development. The complementarity between the two countries is re emerging and gradually becoming a new pivot in bilateral relations.

The future cooperation between China and Germany is expected to extend beyond traditional trade to a higher level. High end manufacturing and green technology are the most promising fields. Germany's technological leadership in precision manufacturing, automation, robotics, medical devices, and environmental protection equipment is highly aligned with China's industrial upgrading needs. With the rapid development of China's new energy vehicle, energy storage, battery and other industries, Germany's experience and standard system in hydrogen energy, components, intelligent manufacturing and other aspects can also become an important cooperation resource for China.

From a longer-term perspective, China's return to Germany's position as its largest trading partner is not only a short-term adjustment in the international trade landscape, but also reflects Germany's new choices in global supply chain restructuring, foreign trade policy changes, and industrial transformation paths. Although the German economy is constrained by structural difficulties and external shocks, this pattern change also provides a new pivot for it to deepen cooperation with China.

Chinese Ambassador to Germany Deng Hongbo once stated that the mutually beneficial cooperation between China and Germany helps each other's development and benefits the people of both countries. It is not only a "risk", but also a guarantee for the stability of China Germany relations and an opportunity to create the future. This year marks the 50th anniversary of the establishment of diplomatic relations between China and Europe. Whether China and Germany can achieve higher quality and more complementary integration in high-tech, green industries, digital transformation and other fields in the future is a common opportunity for both sides. I hope that on the basis of pragmatic cooperation and institutional integration, China and Germany can use this "replacement" as a new starting point to inject new momentum into the development of China Europe relations through high-quality cooperation between China and Germany. (Chen Ximeng, Berlin correspondent of Economic Daily)