Germany’s industrial backbone is facing an unprecedented challenge. Once the leader in high-end manufacturing, the country has witnessed a five-year decline in industrial production, which threatens up to 5.5 million jobs and 20% of gross domestic product (GDP), according to a recent report by the London-based Centre for European Reform (CER).

Moscow's full-scale invasion of Ukraine forced Germany to reduce its reliance on Russian oil and gas, sending energy prices soaring and severely hurting industrial sectors like chemicals and steel. Additionally, post-pandemic supply chain disruptions reduced demand for German exports.

Another major factor is China’s speedy shift from low-value manufacturing to high-tech and innovative industries, driven by the Communist Party's so-called Made in China 2025 strategy, which aims to achieve global leadership in advanced manufacturing and technology.

While Germany was largely unaffected by China’s initial growth spurt in the early 2000s, which focused on low-tech electronics, household appliances and textiles, Beijing’s industrial policy has since zeroed in on Germany’s core sectors, including automotive, clean technology, and mechanical engineering.

"China has caught up in several advanced industries ... they are very strong in these areas ... and that is contributing to Germany's poor growth performance," Holger Görg, head of the International Trade and Investment research group at the German Institute for the World Economy (IfW-Kiel), told DW.

The speed at which China has caught up with Germany is perhaps most evident in the auto industry. German carmakers have been criticized for a lack of........

© Deutsche Welle