{"id":205106,"date":"2025-06-22T12:34:11","date_gmt":"2025-06-22T12:34:11","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/205106\/"},"modified":"2025-06-22T12:34:11","modified_gmt":"2025-06-22T12:34:11","slug":"cheerleaders-to-critics-german-machinery-makers-call-for-eu-action-on-china","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/205106\/","title":{"rendered":"Cheerleaders to critics: German machinery makers call for EU action on China"},"content":{"rendered":"

Germany<\/a>\u2019s iconic machine makers used to be among the loudest cheerleaders for ever-closer economic ties between China and Europe<\/a>.<\/p>\n

Now, as exports dwindle and facing \u201cincreasingly strong [Chinese] competitors\u201d beefed up by \u201cunfair state subsidies\u201d, the industry is demanding that Brussels<\/a> put in place trade barriers to protect it.<\/p>\n

A new position paper published on Thursday by the Mechanical Engineering Industry Association (VDMA), representing medium-sized manufacturers that help constitute Germany\u2019s famed Mittelstand group of businesses, marks a dramatic reversal for an industry that until recently lauded the Sino-German<\/a> economic miracle.<\/p>\n

\u201cThe EU should impose countervailing duties on imports from third countries if they violate EU anti-dumping or anti-subsidy rules. China is a particular focus here with its aggressive export policy,\u201d read the VDMA\u2019s paper.<\/p>\n

The industry group \u2013 whose 3,600 members make everything from power transmission systems and machine tools to semiconductor machines and precision tools \u2013 made clear that it was ready to compete with Chinese rivals on a level playing field. However, it was also unequivocal that it feels those conditions do not exist and that it wants governments to intervene.<\/p>\n<\/p>\n

\u201cChinese companies are heavily subsidised by the government. And they supply products to Europe that sometimes disregard our technical regulations. China is not playing fair, and politicians must respond to this,\u201d said Bertram Kawlath, VDMA\u2019s president.<\/p>\n

The paper marks a break from decades in which German industry grew rich from selling machines made for powering the workshop of the world. Since the Covid-19 pandemic, the VDMA has turned sharp critic of a harsh new reality in Germany\u2019s economic ties with China. It has spoken of being out-competed by fierce rivals in China, Europe and third markets.<\/p>\n

It will provide an early challenge for new Chancellor Friedrich Merz<\/a>, who has taken a tougher rhetorical line on China than predecessor Olaf Scholz, but who will also have to deal with the country\u2019s powerful automotive lobby, whose views are unrecognisable from those of the VDMA.<\/p>\n

While Scholz backed the EU\u2019s de-risking strategy, research has shown that this support did little to unpick Germany\u2019s dependencies on China for critical goods.<\/p>\n

\u201cCompared to the previous year, there has been little change in Germany\u2019s potentially critical import dependency on China,\u201d wrote Juergen Matthes of the German Economic Institute in an assessment published last week.<\/p>\n

The VDMA\u2019s statistics showed a substantial loss of market share in China for its companies.<\/p>\n

German machinery went from holding a 20.4 per cent share in China\u2019s import market in 2015 to 15.1 per cent in 2024. The shipments were down 12.2 per cent over the first quarter of 2025 year-on-year, German government stats showed, exacerbating a trend of declines in five of the last six years.<\/p>\n

\u201cSupported by the \u2018Made in China 2025<\/a>\u2019 strategy, Chinese mechanical engineering companies have become increasingly strong competitors on the global market. Unfair state subsidies for Chinese companies play a major role in international business,\u201d the paper said.<\/p>\n<\/p>\n

The figures chime with broader German and EU trends: over the first five months of 2025, EU exports to China fell 7.3 per cent compared with a year earlier, while Germany\u2019s shipments fell 5.9 per cent.<\/p>\n

At the same time, China\u2019s shipments to Germany and Europe are booming. In May alone, exports to Germany \u2013 the EU\u2019s largest economy \u2013 soared 21.5 per cent, following 20.3 per cent growth in April. To France, shipments were up 24.1 per cent in May, stoking fears that Europe will become a \u201cdumping ground\u201d for Chinese products that are effectively blocked from the United States due to sky-high tariffs.<\/p>\n

Soapbox, a newsletter focused on Chinese trade, forecast that for 2025 as a whole, Switzerland will import more from the EU than China, the world\u2019s second largest economy.<\/p>\n

The VDMA\u2019s intervention comes amid a clamorous debate over the direction of the EU\u2019s China policy and ahead of a crunch summit in July, where leaders will meet in Beijing to discuss thorny issues from trade gripes to China\u2019s ties with Russia.<\/p>\n

With the return of US President Donald Trump<\/a> to the White House and his swift abandonment of the transatlantic alliance, many expected Europe and China to patch up their many differences. A growing body of evidence is emerging, however, to suggest that this will be more difficult than anticipated.<\/p>\n

While China\u2019s commerce ministry has talked up the prospect of a blockbuster deal on electric vehicles<\/a> \u2013 which would see EU tariffs imposed last year replaced with a minimum import price \u2013 EU officials and diplomats said that was highly unlikely in the short term. Briefing ambassadors from the bloc\u2019s 27 member states on Wednesday, meanwhile, the European Commission gave no hint that a deal was close, diplomatic sources said. – South China Morning Post<\/p>\n

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