Full Breakdown
Germany Prepares Broad Economic-Security Package to Counter China’s Growing Influence
By Drooid · · How we work
Background and Economic Pressures
Germany’s trade balance with China now shows a daily deficit of more than €1 billion, while the country’s industrial sector faces tens of thousands of announced job cuts, including Volkswagen’s plan to cut up to 100,000 jobs globally. According to the Federal Statistical Office, German exports to China fell 9.7 % to €81.3 billion in 2025, whereas imports rose 8.8 % to €170.6 billion. Chinese plug-in hybrid models have captured a record one-third of European registrations in July, reflecting consumer demand for cheaper hybrids amid rising gasoline prices and strained household finances.
Key Measures Proposed
The draft package, still under internal review, spans several policy areas:
- Trade – possible new tariffs on China-made plug-in hybrids and mandatory joint-venture structures that give European partners majority control.
- Investment Screening – a revised inbound-screening law that would add “economic resilience” and “strategic dependencies” to the criteria for blocking acquisitions, plus a contemplated outbound-screening regime for German investments in sensitive Chinese sectors.
- Export Controls – tighter restrictions on advanced artificial-intelligence technologies and semiconductor-manufacturing equipment, citing concerns that some Chinese products are used for military purposes.
- Procurement and Supply Chains – stronger local-content incentives, “Buy European” preferences, and measures to diversify sources of critical raw materials such as tungsten.
Official Statements & Responses
Vice-Chancellor and Finance Minister Lars Klingbeil has publicly suggested extending EU tariffs to Chinese plug-in hybrids and requiring joint-venture arrangements under European majority control, while also endorsing “Buy European” procurement preferences. A spokesperson for the economy ministry declined to comment on the specifics.
Outlook and EU Coordination
The German cabinet aims to approve the package by mid-October, after which the government plans to lobby other EU members and present a joint position paper at an upcoming summit in Brussels. The proposals are expected to feed into a broader national economic-security strategy slated for release later this year, potentially shaping EU-wide measures on trade, investment and technology security.