German Mittelstand Investment Appetite Falls to 1995 Low as China Competition Intensifies
Updated
Updated · Financial Times · Jul 30
German Mittelstand Investment Appetite Falls to 1995 Low as China Competition Intensifies
1 articles · Updated · Financial Times · Jul 30
Summary
52% of German SMEs plan to invest over the next six months, the lowest appetite since the survey began in 1995 and below levels seen during the financial crisis, Covid-19 and the Ukraine energy shock.
China is a key driver: German machinery exports to China fell 8% last year and another 8% so far this year, while Chinese equipment imports into Germany rose 14% over the same period.
26% of companies expect business conditions to improve, underscoring pressure on family-owned industrial groups that are racing to add AI to machinery while facing cheaper, faster-moving Chinese rivals.
German industry leaders say domestic burdens are worsening the squeeze, citing corporate taxes about 5 percentage points above the OECD rich-country average, high labour costs and extra regulation.
Brussels is also under pressure to move faster on dumping, subsidies and diverted Chinese goods, as Mittelstand executives warn Europe needs a more competitive industrial base amid broader geopolitical dependence risks.