In recent news from Epoch Times on November 12, 2025, it has been reported that China’s weak domestic demand has led to a surge in exports, with industries such as automobiles and steel significantly increasing their exports to Germany. Alongside traditional industries, online platforms like Shein and Temu have achieved record-high turnover in Germany, intensifying concerns of “Chinese impact” exacerbating the manufacturing crisis in Germany and even across Europe.
A recent study by the European Central Bank has revealed that China’s sluggish domestic economy is transforming into a strong external expansion. The report highlights that industries experiencing slow domestic sales growth in China are performing remarkably in terms of exports, particularly in sectors like automobiles and steel exporting to the EU. In the first nine months of this year, Chinese automobile exports to the EU saw a growth of over 20%, with steel exports also showing an accelerating trend. This shift is not just aftermath of trade tariff disputes but a strategic reorientation of Chinese enterprises towards overseas markets to absorb excess production capacity.
This phenomenon has exacerbated trade imbalances in Europe, with Germany as the EU’s largest economy facing the impact of a surge in Chinese exports. According to data from the German Federal Statistical Office, Germany’s imports from China have exceeded 100 billion euros in the first three quarters of this year, while exports were only around 60 billion euros, leading to a deficit nearing historical peaks. Experts predict that Germany’s trade deficit for the entire year will reach 870 billion euros, a significant increase of 200 billion euros from the previous year.
Jürgen Matthes, Director of International Economic Policy at the Institute of German Economic Research, has pointed out that Chinese subsidies and currency control policies distort the competitive environment, making German exports more expensive and Chinese imports cheaper. He urged the EU to initiate anti-subsidy tariffs to protect domestic industries.
The rapid expansion of Chinese-owned e-commerce platforms has become the “frontline battlefield” of trade imbalances. A recent study by the German Retail Association (HDE) reveals that the combined turnover of Shein and Temu in Germany this year is approximately 33 billion euros, accounting for 5% of the total e-commerce volume in the country. Foreign retailers from so-called “third countries” outside the EU have also seen slightly higher total sales in Germany, surpassing 80 billion euros. Data from HDE indicates that Shein and Temu account for about half of the sales of these foreign retailers.
Shein focuses on fashion apparel, while Temu covers home and daily goods, both leveraging tactics like flash sales and countdown discounts to quickly attract a large number of consumers. HDE has warned that these platforms are eroding market share in the European retail sector through low-cost dumping and algorithm-driven promotions.
The European Commission is pushing for new regulations to curb the “cheap Chinese influx.” The proposal includes imposing a 2 euro import fee on packages valued at less than 150 euros, aiming to reverse the influx of over 46 million tax-free small packages into the EU last year. The German E-Commerce Association (BEVH) has accused Shein and Temu of evading EU safety standards, with frequent cases of counterfeit products and a lack of consumer rights protection.
For example, the Foundation of Goods Testing in Germany’s investigation has shown that some products on Shein and Temu platforms have safety hazards, such as unsafe toys, jewelry containing toxic heavy metals, and overheating chargers. After testing 162 products from the two companies, 110 failed to meet EU standards.
Preliminary investigations by the European Commission have shown that Temu poses a high risk of illegal product circulation, with banned sellers repeatedly violating the Digital Services Act (DSA). Potential fines could amount to 6% of Temu’s global annual revenue, reaching hundreds of millions of euros given its 45 million monthly active users in the EU. Additionally, the European Consumer Protection Network (CPC) has highlighted issues with Temu, including false discounts, fake reviews, and concealed contact information.
Recently, the governing coalition in Germany (CDU/CSU and SPD) reached a consensus to establish a bipartisan committee comprising about 12 experts to thoroughly examine economic relations with China. The committee’s tasks include investigating security-related economic ties between Germany and China, evaluating the security and reliability of value chains, reviewing China’s dependency on critical infrastructure investments, analyzing risks in energy and raw material imports, and drawing insights from other countries’ strategies towards China. It will provide annual reports and biannual updates to the Economic Committee.
Members of the committee include representatives from Bertelsmann Foundation, Federation of German Industries (BDI), Association of German Chambers of Commerce and Industry (DIHK), German Council on Foreign Relations, Foundation for Science and Politics, Federation of German Trade Unions, Institute of German Economic Research, and Kiel Institute for the World Economy. The committee’s aim is to offer legal, economic, and political assessments and propose adjustments to external economic laws and redirection strategies.
Hildegard Bentele, a European Parliament member from the CDU, emphasized that businesses often prioritize cheap imports over safety premiums, and the economic sector faces a critical obstacle of urgency that needs to be recognized to address the severity of the issue.
Jürgen Matthes from the German Economic Institute (IW) has called on the EU to accelerate “de-risking” through anti-dumping measures and domestic incentives.