Morning Briefing: The second side of the China shock to the economy

The China shock that is currently shaking up the German economy has two sides: It is not just Chinese goods that are flooding Europe's markets at dumping prices. It is also a Chinese market that is no longer profitable for European companies as it used to be. Or as a German car manager put it to our car reporters, between us: “The last few months have simply been shitty.”

Conversely, things are going badly in China, especially for the auto industry: While the overall Chinese market shrank by 20 percent from January to August, the loss for VW, BMW, Mercedes, Audi and Porsche together is 27 percent. The China business could soon become a loss-maker for individual companies.

So it's not just German politics that has been asleep, as it hasn't done anything to counter China's state-pampered cheap products for a long time. But also the top executives in German companies who for a long time were under the amusing assumption that the fantastic business figures from China would be delivered free of charge forever.