Germany’s Path Forward: Building on Leading Edges to Counter China’s Challenges

China has made substantial economic progress during the last decades, shifting towards advanced manufacturing and technologies. Chinese firms in key sectors have received massive subsidies which enable them to produce at lower costs and to better compete in the global markets. One key example here is the car industry, particularly the production of electric vehicles (EVs). While Chinese EV producers have substantially increased their competitiveness in price and technology globally, German carmakers are often criticized for not adapting quickly enough to increased competition, especially from China. Other German key industries like mechanical engineering and the chemical sectors are also facing rising market challenges from China.

In a recent interview, Prof. Holger Görg, Ph. D. (KCG Managing Director) argued that China, catching up in several advanced industries, contributes to “Germany’s poor growth performance”. He emphasized that “It’s important [for Germany] to focus on areas where Germany remains strong — pharmaceuticals, biotechnology and knowledge generation.” It is essential to keep building on Germany’s leading edges in these areas.

The interview “China’s growing grip on key German industries” was published by the Deutsche Welle on March 2, 2025 and is accessible here.

Contact:

Prof. Holger Görg, Ph.D. (holger.goerg@ifw-kiel.de; +49(0)431-8814-258)