"China's industry is rapidly expanding its global market share!"

Despite the numerous crises, the global economy is still growing. Although Germany's global export share has remained relatively stable in recent years, the gap with the leader China is widening. The German newspaper "Handelsblatt" reported on the 15th that according to the latest report from the Prognos Institute, Chinese competitors are leading almost all sectors. Chinese enterprises currently account for twice as much of the global exports as German companies. China is a very strong competitor, but "not overwhelming".

China's share of the global market is 16%, ranking first; Germany is 8%, ranking third; the second is the world's largest economy, the United States. Germany can only match China in a few industries such as automobiles, medical technology, and aviation.

Experts at the Prognos Institute expect that as the United States becomes increasingly isolated from other parts of the world, competition between Germany and China for global market shares will become more intense in the coming years.

China's industrial export share leads globally

Over the past decade, Germany's global export share has remained around 8%, establishing its status as a major export-oriented economy. So far, Germany's global market share in industry has basically remained stable, but China has been continuously catching up, gradually surpassing Germany.

A recent study by the German Central Bank also pointed out that Germany not only lags behind China in the global market, but also lags behind China in the markets of other Eurozone countries and the United States.

The report from Handelsblatt

The Prognos Institute focused on six areas where German industry traditionally had strong positions: automotive, mechanical engineering, electrical engineering, electronics and optics, as well as "other vehicle manufacturing"—a category that includes rail industry and aircraft manufacturing.

In 2013, in three of the six product categories—automotive, mechanical engineering, and other vehicle manufacturing—Germany's global export share was still higher than China's.

But by 2023, Germany only led in automobile exports, although the lead had significantly narrowed. In the automotive industry, Germany's advantage over China had shrunk from 15 percentage points in 2013 to 6 percentage points in 2023.

Overall, the gap between the two countries' world export shares has shifted in favor of China in all the considered product categories. Moreover, China's lead is expanding, especially in electrical equipment and metal products. In these two product categories, the gap between China and Germany's world export shares widened by about 9 percentage points within a decade.

Large manufacturing plants in Germany

What worries German manufacturing is that Chinese enterprises have successfully opened up almost the entire world!

According to the Prognos Institute's forecast, German enterprises still hold a very strong position, especially in Europe and North America. Only in Europe does Germany's market position clearly exceed its Far Eastern competitors.

China's share of the total import market in EU countries has significantly increased over the past decade, rising from about two percentage points in 2023 to 8%. Despite a slight downward trend in Germany's exports to the EU market, it still holds a significantly higher market share of 18% here.

In many developing and emerging countries, due to significant growth in recent years, China has always been far ahead. In recent years, Chinese industry has rapidly expanded its market share in Southeast Asia, South America, and Australia.

A region where German industry may again catch up is South Asia, including India. The EU hopes to reach a free trade agreement with India.

Chinese robots at a German exhibition

The report also acknowledges that, overall, China's increase in market share in many sales regions (so far) has hardly come at the expense of German exports!

Therefore, German experts believe: "China is a strong but not overwhelming competitor." Both businesses and politicians have an "elastic" starting advantage that can create conditions for future competitive domestic export industries. "Policy makers must improve market access through further free trade agreements," said Broschard. "Finally, China must ensure fair competition."

Electric vehicles have become the new main force for "Made in China" to go global

So Aoki believes that Germany and Western manufacturing need to compete for global market shares, the key is their own products.

This also gives a loud slap to the current heated discussions within Germany and the EU about so-called Chinese production overcapacity, suppressing "German manufacturing" exports. In fact, Germany has far more overproduction than China in areas like car manufacturing. Perhaps it is the strength of Chinese industry that makes Germany and Europe worried, because more high-tech Chinese products are entering Europe. But as someone said, the world is big enough to accommodate both "Made in China" and "Made in Germany"!

Whether it is "Made in China" or "Made in Germany", to obtain a larger global share in the future, it is not only about technological content, but also about networking, supply chains, and greater cost-effectiveness and after-sales service. From any perspective, Chinese industry obviously shows greater advantages and potential.

Original article: https://www.toutiao.com/article/7527288767950881290/

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