Germany grapples with a new wave of Chinese industrial competition, threatening its economic stability.

In a recent podcast, Mark Leonard, Janka Oertel, and Andrew Small discussed the implications of ‘China shock 2.0’ on Germany and Europe. This surge of Chinese competition, fueled by overcapacity and state support, is impacting key sectors like automotive, chemicals, and machinery.

As job losses mount, concerns grow over Europe’s economic resilience. The crisis is not only reshaping the industrial landscape but also stirring political tensions in Germany, particularly for Chancellor Friedrich Merz ahead of upcoming regional elections. The discussion highlights potential policy responses from Brussels and European capitals to safeguard industrial interests without escalating tensions with China.