Germany’s trade deficit with China widens as Chinese firms reduce reliance on European imports

Sunday 09 August 2026 - 11:45

By: Sahili Aya

Germany’s trade deficit with China widens as Chinese firms reduce reliance on European imports

Germany’s trade imbalance with China widened during the first half of 2026, as German exports to the Asian market declined sharply while imports from China continued to increase, according to preliminary data from Germany Trade & Invest (GTAI).

The figures highlight a significant shift in the commercial relationship between the two economies. China remains Germany’s largest trading partner overall, but its importance as a destination for German-made goods has fallen substantially as Chinese companies increasingly rely on domestic production and supply chains.

German exports to China fall below €37 billion

German exports to China dropped by more than 12% year on year between January and June, falling to just under €37 billion, according to the GTAI data.

The decline has pushed China down to ninth place among Germany’s export markets, a striking change from 2021, when it ranked second.

The figures point to mounting difficulties for German companies seeking to maintain their position in the Chinese market, particularly as local manufacturers become more capable of producing goods and technologies that were previously sourced from European suppliers.

Imports from China move in the opposite direction

While German exports weakened, imports from China increased significantly.

Germany imported €91.8 billion worth of Chinese goods during the first six months of 2026, an increase of 8.9% compared with the same period a year earlier.

The widening gap between exports and imports has consequently placed additional pressure on Germany’s bilateral trade balance with China.

For German industry, the trend underscores a broader transformation in the relationship: China is not only an important source of manufactured goods but is increasingly competing with European producers in sectors where German companies have traditionally held strong positions.

China becomes less dependent on European industry

The shift reflects Beijing’s broader drive to strengthen domestic production and reduce dependence on foreign suppliers.

For years, German companies benefited from China’s demand for machinery, industrial equipment, automobiles and other high-value manufactured products. As Chinese businesses develop more domestic alternatives, however, European exporters face a more competitive environment.

The changing trade figures could therefore have wider implications for Germany’s industrial economy, particularly for businesses whose growth strategies have historically relied heavily on Chinese demand.

At the same time, China’s continued position as Germany’s largest trading partner shows that the two economies remain deeply interconnected, even as the balance of commercial activity increasingly moves in Beijing’s favour.