Germany’s industrial backbone is facing an unprecedented challenge. Once the leader in high-end manufacturing, the country has witnessed a five-year decline in industrial production, which threatens up to 5.5 million jobs and 20% of gross domestic product (GDP), according to a recent report by the London-based Centre for European Reform (CER).
Moscow’s full-scale invasion of Ukraine forced Germany to reduce its reliance on Russian oil and gas, sending energy prices soaring and severely hurting industrial sectors like chemicals and steel. Additionally, post-pandemic supply chain disruptions reduced demand for German exports.
Another major factor is China’s speedy shift from low-value manufacturing to high-tech and innovative industries, driven by the Communist Party’s so-called Made in China 2025 strategy, which aims to achieve global leadership in advanced manufacturing and technology