(Deutsche Welle Chinese website) On Thursday (October 15), EU leaders opened a two-day summit in Brussels. Trade policy is one of the most important topics of the summit, including the relationship between China and the EU and discussions on how to curb the surge in Chinese exports.
Faced with a huge trade deficit and concerns that cheap Chinese goods could threaten European local industries, EU leaders want to discuss possible protective measures.
How much pressure do German industrial companies face to act? Germany's WirtschaftsWoche has exclusively obtained data from a survey conducted by the Forsa Institute.
From June to July 2026, investigators interviewed representatives of 151 industrial companies by telephone. The interviewed companies cover machinery and equipment manufacturing, automobile manufacturing, as well as energy-intensive industries such as chemicals and papermaking.
The survey showed that more than a quarter of industrial companies (28%) lost competition or tenders for orders to Chinese suppliers. 13% of companies watched existing customers switch to Chinese competitors. Losing a new order to a competitor with a lower price often happens. But the loss of a long-time customer is far more serious.
Christian Säuberlich, head of FTI-Andersch's German operations, pays particular attention to data from the machinery and equipment manufacturing industry. He said that 22% of the companies surveyed have experienced original customers switching to Chinese competitors. This is a warning sign.
How German industry responds to competitive pressures
At the same time, most managers interviewed believe that their own companies have technological advantages over Chinese suppliers. But Zoe Bellich said: "Technical advantages do not automatically guarantee that you will not lose customers or orders."
What countermeasures have German companies taken? How does German industry respond to pressure from China?
Schaublich said that for many companies, emphasizing the origin and quality of their products is one of the most important ways to respond. Across all industrial industries, 60% of companies use "produced in Europe" as a quality assurance; in the machinery manufacturing industry, this proportion is even higher, reaching 72%.
The automotive industry is particularly focused on further highlighting product quality or system integration capabilities. In contrast, only a smaller proportion of the companies surveyed have taken measures such as cutting costs and opening up production capabilities to Chinese partners.
Nearly half of the companies surveyed (48%) have conducted business in China in the past three years. Despite increasing competition, China remains indispensable to many industrial companies. "China cannot be easily replaced either as a sales market or as a purchasing region," Szaublich said.
For these companies active in China, the importance of the Chinese market has even increased.
In energy-intensive industries such as chemicals, 43% of companies said the Chinese market has grown "slightly" or "significantly"; 31% in the machinery manufacturing industry. The exception is the automotive industry: one-third of companies in this industry believe that China's importance is declining.
The response conclusions drawn by each enterprise are different. Once action is taken, it will mainly focus on getting closer to the Chinese market.
20% of companies have strengthened their R&D, procurement and production layout in China in accordance with the "local-for-local" approach; 19% of companies have focused on profitable subdivisions; 18% of companies have established or expanded cooperative relationships with Chinese companies; 13% of companies have developed products specifically for the Chinese market; 12% of companies have increased investment in China.
Leaving China is hardly a consideration: only 4% of companies have reduced their operations in China or abandoned production bases in the past three years.
EU brewing new trade weapons
The survey also reveals the dilemma faced by EU leaders in Brussels: they must find a balance between taking tough measures and avoiding escalation, because German industry needs to balance both - not only to protect itself from the impact of China, but also to maintain access to the Chinese market.
Germany's cautious approach to China is also wavering. Over the past few months, previous caution over concerns about Chinese retaliation at the expense of German exporters has turned into a willingness to escalate countermeasures.
German Chancellor Mertz and French President Macron previously jointly sent a letter to European Commission President von der Leyen, proposing the establishment of a new mechanism: if the unfair behavior of trading partners continues, they can be excluded from the EU market. It is the so-called "one-click termination mechanism" (kill-switch plan).
After the summit, Von der Leyen said that the EU will develop a new tool so that it can quickly restrict relevant parties from entering the EU market when it is in line with the EU's interests.
