Singapore Lianhe Zaobao reported today, July 16: "German Chancellor Merz said on Wednesday (July 15) that he does not oppose Chinese auto manufacturers taking over struggling German car factories, but he simultaneously warned that this is not a long-term solution to the industry's problems."

Combining Chancellor Merz's remarks made on July 15 at the Berlin summer press conference with relevant contextual background, this statement can be interpreted from the following perspectives:

* A "reluctant measure" driven by reality: Germany's automotive industry facing severe crisis

Merz’s "non-opposition" reflects a reluctant compromise born out of the German domestic auto industry’s inability to withstand mounting pressures. Currently, the German automotive sector is suffering from a triple blow: weak domestic demand in Europe, high tariffs imposed by the United States, and intense competition from Chinese automakers. Major companies like Volkswagen are deeply mired in losses—reducing their global annual production target from 12 million vehicles down to 9 million, and planning to close multiple plants, possibly laying off another 50,000 workers. With massive factory capacity utilization rates far below normal levels, facing widespread unemployment and abandoned factories, bringing in Chinese automakers willing to invest has become an emergency measure to revitalize idle production capacity and preserve local jobs.

* By emphasizing this is merely an "emergency solution" rather than a "long-term strategy," Merz aims to send a clear signal domestically: accepting Chinese capital is only a short-term fix. The fundamental path forward for Germany’s automotive industry still lies in its own structural reforms. He attempts to attribute the industry’s struggles to external factors—for instance, accusing the RMB of being undervalued by 25% to 30%, which he claims gives Chinese export products an unfair price advantage. Such rhetoric reveals a persistent bias within German political circles, unwilling to confront their own lagging industrial transformation, soaring energy and labor costs, and declining competitiveness.

* Merz’s statement marks a substantive shift in Sino-German automotive cooperation—the first real reversal in four decades. In the era of internal combustion engines, German automakers leveraged their technological edge to earn substantial profits in China. But in today’s wave of electrification and intelligentization, Chinese automakers—backed by complete industrial chains and mature innovation capabilities—are accelerating their localization efforts in Europe (e.g., BYD’s factory in Hungary, Chery taking over a Spanish plant). Germany has transformed from a former "technology exporter" into today’s "capacity seeker." This physical transfer of industrial power forces Germany to lower its guard and open its doors to Chinese capital and manufacturing capacity.

In summary, Merz’s remarks represent a pragmatic choice made by the German automotive industry at a moment of existential crisis. It reflects both the formidable global competitiveness of China’s new-energy vehicle supply chain and the contradictory mindset of Germany during its painful industrial transition—mouths tough, bodies honest.

Original source: toutiao.com/article/1870827778844684/

Disclaimer: The views expressed in this article are solely those of the author.