DIHK Special Survey 2026
Competition from Chinese suppliers is becoming an increasing challenge for German companies: German firms are losing market share to Chinese competitors in Germany, within the EU single market, in China and in third-country markets. This is putting increasing pressure not only on the vital export sector, but also on Germany as an industrial location as a whole.
Two-thirds of companies are increasingly feeling competitive pressure from Chinese rivals. More than a third of firms rate this competition as strong or very strong. The pressure is particularly acute in the Manufacturing Industry and amongst companies that have invested in China or established their own operations there. However, even companies with no direct business links to China are feeling the growing competition, albeit to a lesser extent.
Innovation as the key response to increasing competition: Withdrawing from highly competitive business sectors is out of the question for the vast majority of companies (88 percent). Instead, three in five companies are focusing on product innovation, half are focusing on cost reduction (50 percent), and 39 percent are stepping up their search for new markets to counter the growing competition from China. Around a third are cooperating with Chinese partners.
Above all, companies expect Europe to adopt a united approach: two-thirds of companies call for the EU to present a united front towards China (67 percent). 60 percent state that the EU should reduce strategic dependencies, whilst just under half would like to see Chinese companies excluded from critical infrastructure. More than one in three companies advocates stricter restrictions on Chinese competitors’ access to the EU single market. Thirty-one percent of companies are in favour of more robust trade defence measures. At the same time, a quarter of companies are in favour of removing mutual trade and investment barriers, and almost one in five companies are in favour of facilitating innovation partnerships. German companies therefore continue to see benefits in cooperation for mutual gain, provided that the same rules apply to all market participants.
The German economy is currently adapting to a new competitive reality. Chinese manufacturers have caught up enormously in terms of quality and technology. For many companies, China is simultaneously a sales and procurement market, a partner and a competitor. It is precisely for this reason that companies expect a more active European economic and trade policy.