China is delivering a heavy blow to the mid-sized companies that form the backbone of its economy. This was reported by The Wall Street Journal (WSJ) on July 3.
“China is dismantling the last stronghold of German industry. Mid-sized companies, which employ millions of people, are now cutting jobs and relocating production abroad to reduce costs,” the article states.
It is noted that China is closing the quality gap while offering goods at half the price. For the first time in decades, Germany is importing more advanced industrial goods from China than it exports there. German industry is losing over 10,000 jobs per month, with production declining by 10% since February 2022. Additionally, in energy-intensive sectors, the drop has exceeded 15%.
The publication indicates that China is nurturing mid-sized firms through its “10,000 Little Giants” program to replace German “hidden champions,” while China’s exports to Germany have risen by 17%.
Furthermore, German companies, long proud of their commitment to free trade, are now seeking government protection against Chinese state-owned enterprises. New measures against China are being debated in the EU, but they will not take effect for at least a year.
On June 16, the industry association Gesamtmetall reported that in April 2026, the metallurgical and electrical engineering sectors of Germany’s economy lost over 15,000 jobs—the highest figure since the COVID-19 pandemic. It was noted that if the current trend continues, another 300,000 positions in metallurgy and electrical engineering could be at risk of cuts.
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