Source: Sander Tordoir and Brad Setser, “China Shock 2.0: The Cost of Germany’s Complacency” (Center for European Reform and Council on Foreign Relations, May 2026).
Commentary: Since the pandemic, China’s export volumes have increased by over 40 percent, while imports have stayed relatively stable, increasing both the self-sufficiency of China and the intrusion of Chinese products into third-country markets. In fact, China has outperformed the global economy in terms of exports, with Chinese exports growing two times faster than global trade. This overperformance has also been matched by export underperformance in the European Union (EU). One such EU country, Germany, has seen its exports decline rapidly. German exports to China as a share of GDP have declined by more than 40 percent since 2021, while the German labor force has seen a decline of more than 400,000 jobs linked to exports to China. This decline in exports has had a tangible impact on Germany’s gross domestic product (GDP), which is about 6 percent below the country’s pre-pandemic growth plan. Forty percent of this decline can be attributed to Germany’s weak export performance.
