China's export excess undermines German manufacturing sector and market rivalry
In a recent interview with Spiegel, Wolfgang Niedermark, a member of the executive board of the Federation of German Industries (BDI), highlighted the competitive pressure Chinese companies are exerting on the German economy.
Niedermark emphasized that Chinese companies are 'playing hardball' and posing significant challenges due to overcapacities and predatory pricing in various sectors. He identified overcapacities as one of the greatest long-term risks for the industrial locations of Germany and Europe.
The BDI has previously stated that overcapacities and predatory pricing in sectors such as wind power, electric vehicles, machinery, chemicals, and semiconductors pose a significant challenge to the German economy. Chinese companies, it seems, are aggressively exporting and investing in Europe due to domestic overcapacity and declining margins, supported by state subsidies.
Key Chinese companies expanding their overcapacities into Europe include major electric vehicle manufacturers like BYD, MG, Leapmotor, and XPeng. At the IAA 2025, over 100 Chinese firms were present, including 30 car brands. In the automotive supplier sector, Hasco is noted as a global leader among about 18,900 Chinese suppliers generating significant revenue.
Niedermark warned of a potential shift in trade flows towards the EU as Chinese companies increase their exports due to weakening domestic demand. However, this shift could also lead to increased competition and pressure on European industries across machinery, chemicals, wind turbines, electric vehicles, and semiconductors.
The overcapacities and predatory pricing by Chinese companies threaten the stability of markets, according to the BDI. Furthermore, intellectual property rights are frequently violated by Chinese companies. Emerging economies in Asia and South America are also increasing protective measures, adding to the competitive pressure.
The USA is closing its market to China, which could potentially divert trade flows towards the EU. Niedermark continued to express concerns about the impact of Chinese companies on the German and European economies, stating that the overcapacities distort competition and threaten the stability of global markets.
In conclusion, the German economy is facing intense competition from Chinese industries, particularly in sectors such as steel, solar, batteries, wind power, electric vehicles, machinery, chemicals, and semiconductors. The BDI urges caution and strategic planning to navigate this challenging landscape and protect the interests of German and European industries.
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