Germany's Most Promising Industries Depend on China

According to a study published on Thursday by the ZOE Institute for Future-Fit Economies in Cologne, Germany's most promising industries are among those most closely tied to Chinese supply chains.

The report assessed 62 German industries on their future value prospects and links to green technologies. Clean-tech sectors such as battery, electric motor and switchboard manufacturers lead the ranking. However, many of them rely on China for components and, in some cases, for sales as well. Co-author Marla Schiefeling said China matters to these industries not only as a competitor, but also as a supplier and a buyer.

This leaves Berlin facing a difficult choice: it needs to reduce its dependence, yet the fastest way to scale up is through cheap Chinese components. The authors propose diversifying suppliers and boosting demand within Germany and the EU.

According to the study, around 420,000 manufacturing jobs were lost between 2019 and 2025, while German exports to China fell 29 percent from their 2021 peak. Co-author Lukas Bertram described this as a structural problem. Carmakers rank among the top three industries in eight of the 10 green supply chains examined. Coal power, oil refining and fertilizer production, by contrast, have little future in Germany.

In Brussels, the EU's Industrial Accelerator Act is under debate. The plan could require governments to give preference to low-carbon goods made in Europe. Bertram warned that for companies that can source parts only from China, such rules could initially push prices up.