BERLIN: Germany’s trade deficit with China widened sharply in the first half of 2026 as German exports to China fell by more than 12% while imports from the Asian country increased, preliminary data from Germany Trade & Invest (GTAI) showed.
German exports to China dropped to just under €37 billion between January and June, making China only the ninth-largest market for German goods. China had been Germany’s second-largest export destination as recently as 2021.
At the same time, German imports from China rose 8.9% to €91.8 billion, widening Germany’s trade deficit with China to about €55 billion, compared with €40 billion during the same period last year.
Why Are German Exports to China Falling?
GTAI East Asia expert Corinne Abele attributed the decline to weak Chinese domestic demand and the growing focus of Chinese companies on domestic supply chains.
German companies are also producing more goods inside China, reducing the need to export products from Germany, while China’s property-sector crisis and financial pressures on regional governments have weighed on investment.
China’s reduced reliance on German imports also reflects its growing technological and industrial capabilities, according to Commerzbank economist Vincent Stamer.
Germany’s manufacturing sector is facing pressure from both Chinese competition and US tariffs, with major industrial companies including Volkswagen announcing significant job cuts.
How Important Is China to Germany’s Trade?
Despite the widening deficit, China remained Germany’s largest overall trading partner in the first half of 2026.
Total German-Chinese trade exceeded €128 billion, around €3 billion more than Germany’s trade with the United States. German imports from the US rose 7.1% to nearly €51 billion, while German exports to the US fell about 6% to just over €74 billion.
Germany’s overall exports increased 3.7% to €817 billion through June, indicating that the decline in Chinese demand has not prevented German exports from rising overall.
France and the Netherlands remained among Germany’s other leading export markets.
What Does the Shift Mean for German Industry?
The changing trade balance highlights a broader shift in Germany-China economic relations, with China becoming less dependent on European industrial imports while remaining a major supplier to the German market.
Stamer said the trend showed China becoming more independent of Western economies and narrowing the technological gap with them.
Germany’s industrial sector is consequently facing pressure to adapt to a more competitive global market. Stamer said the “Made in Germany” brand would need to reinvent itself as German companies confront stronger Chinese competition and continuing US trade barriers.