Critics of the current industrial trajectory warn that German companies are sleepwalking into a dangerous trap of over-dependence on China. By prioritizing short-term profits and market access, these firms are making themselves vulnerable to Beijing’s political and economic whims. The recent use of export controls on critical minerals and technology demonstrates that China is willing to weaponize supply chains to achieve its strategic goals. When German industry relies on a single, increasingly state-dominated market for both sales and essential inputs, it loses the autonomy required to navigate future geopolitical crises.
This reliance also undermines the resilience of the German economy. As companies shift more production to China, they hollow out the domestic industrial base, leaving the country susceptible to deindustrialization. This is not just a matter of losing manufacturing jobs; it is a loss of technological sovereignty and the erosion of the 'Mittelstand'—the small- and medium-sized enterprises that form the backbone of the German economy. These smaller firms often lack the resources to diversify their supply chains, making them the first victims when production stoppages or trade restrictions occur.
Furthermore, the current approach creates a conflict between corporate interests and national security. While individual companies may benefit from their presence in China, the collective result is a weakened Germany that struggles to assert its economic interests on the global stage. A more robust policy of 'de-risking' is required, one that encourages diversification into other regions and invests in domestic competitiveness. Ignoring these risks in favor of immediate market access is a short-sighted strategy that threatens the long-term stability and prosperity of the nation.