Why did German exports to China decline?

Germany’s exports to China fell significantly by 11.3% in the first four months of 2023, compared to the corresponding period last year, raising widespread concerns about the EU’s overall economic strength, and in the light of the vast challenges facing industrial power on the continent.

The decline in demand from Asia’s largest economy (China) is in turn foreshadowed by violent shocks to Berlin’s strategy to overcome the industrial challenges it faces as well.

According to global media, “the decline in German exports to China has shaken Europe’s largest economy.”

In parallel, the report reported on the impact of Germany’s huge manufacturing sector’s decline, compared to the performance of the manufacturing sector in other rival countries that benefited from a rebound in Chinese demand.

Several major German companies – which maintain significant business in China – have reported significant declines in sales in the country’s first quarter, including the BASF chemicals group, Volkswagen, the country’s leading automaker, and Bosch, an auto parts producer.

Moreover, China represents an important market for German companies in sectors such as automobiles, machinery, equipment, electronics and chemicals, and therefore any contraction in German exports to China could in turn affect German companies in these sectors, and thus could affect Germany’s and the EU’s overall economic growth.