Germany’s economy, the largest in Europe, is suffering from what economists call the China shock, which threatens its growth model based on exporting complex manufactured goods. The country contracted in 2023 and 2024, posting only 0.2 percent growth last year, while major industrial groups cut tens of thousands of jobs: 50,000 at Volkswagen, 8,000 at BMW by the end of next year and 13,000 at Bosch by 2030. Germany now imports more from China than it exports in the very categories where it once dominated, including automobiles, trucks, trains and factory machinery. China offers comparable quality products at significantly lower prices, driven by lower production costs and state support. In response, some German companies are partnering with Chinese manufacturers, while the European Union has imposed tariffs on certain Chinese goods and Berlin has launched a 500 billion euro infrastructure fund.
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