Europe Express: Eastern regrets

A report released today concludes the two are connected, as China is increasingly replacing German imports with goods produced by its own automotive, clean technology and aviation industries, which are also taking over other markets in South America and Asia.

“China’s pivot to aggressive export-led growth is undercutting German manufacturing,” says Sander Tordoir of the Centre for European Reform, who co-authored the report with Brad Setser of the Council on Foreign Relations.

Manufacturing still accounts for a fifth of German GDP and 5.5mn quality jobs, Tordoir adds.

The report recommends policies to help Germany weather the shock — though they require help from Brussels.