I recently came across an analysis about the changing economic relations between Germany and Europe, which I found quite interesting.

The core issue is actually quite simple: in the past, Europe provided technology and equipment, while Asia handled manufacturing and production, and the two sides worked well together. But now, Asian countries are taking on R&D and manufacturing themselves, and Europe is starting to feel uneasy.

The data speaks for itself: Germany’s trade and investment department predicts that by 2025, the trade deficit with China will reach 87 billion euros, equivalent to over 100 billion USD. This number is indeed startling. But there’s a detail—Germany’s statistics include re-exports from neighboring countries. According to another set of figures, the trade deficit for the first 10 months of 2025 is about 20.7 billion USD, and for the full year, it could be around 26 to 27 billion USD. There are discrepancies, but the core issue isn’t about the numbers themselves.

What’s even more painful are the changes at the industrial level. Germany’s traditional strengths in automobiles, electrical equipment, tunnel boring machines, and chemicals are seeing a major reshuffle in the competitive landscape in recent years. German companies aren’t being squeezed out of the global market; they’re struggling to compete even within Europe’s own backyard, or even in Germany itself. Facing prices offered by new competitors, they really can’t come up with effective responses.

The media is amplifying this pressure, and politicians’ attitudes are shifting as well. But the reality is, some issues can’t be solved simply by changing policies. The core of industrial competition ultimately comes down to the competitiveness of the companies themselves. That’s where the real problem lies.