China's growing grip on more than Germany's car industry

Germany’s industrial backbone is facing an unprecedented challenge. Once the leader in high-end manufacturing, the country has witnessed a five-year decline in industrial production, which threatens up to 5.5 million jobs and 20% of gross domestic product (GDP), according to a recent report by the London-based Centre for European Reform (CER)

The CER report called on Germany's next government — a likely coalition of the conservative CDU/CSU alliance and the center-left Social Democrats (SPD) — to pressure China to increase domestic consumption rather than relying mostly on imports for growth.

The study's authors also highlighted the need to exploit EU trade defenses to hike tariffs on heavily subsidized Chinese exports, including EVs and wind turbines.

"What Germany needs are alternative markets for its autos and high-end machinery exports. And the biggest for Germany by far is the European market," said Setser, who is also a senior fellow at the New York-based US Council on Foreign Relations (CFR).