A leading Brussels thinktank has issued a stark warning to Germany, urging the nation to rethink its admiration for China’s economic model or face a severe case of deindustrialization akin to the 'China Shock' that devastated U.S. manufacturing two decades ago.
The Centre for European Reform (CER) highlighted Germany’s surging trade deficit with China, which has doubled from $12 billion in 2024 to $25 billion in 2025, contributing to a staggering $94 billion imbalance. The thinktank cautioned that Germany risks repeating the U.S. experience of the early 2000s, when a flood of Chinese imports permanently hollowed out industrial towns across the Midwest, leaving lasting economic scars.
'China has already eaten much of German industry’s lunch and is preparing to start on dinner,' the CER report stated.
The warnings come as Germany navigates its role within the EU, where China’s growing economic influence has raised concerns about sovereignty and industrial competitiveness. The CER emphasized that Germany’s current trajectory could lead to irreversible damage to its manufacturing base, echoing the challenges faced by American workers during the first 'China Shock.'
As global trade dynamics shift, the report calls for Germany to adopt protective measures to safeguard its industries and workers—a lesson the U.S. has learned the hard way. The CER’s findings underscore the urgent need for economic policies that prioritize national sovereignty and resist the allure of short-term gains from overreliance on Chinese trade.