VDMA Vice President: Chinese Machines 50% Cheaper, German Manufacturers Under Huge Pressure

China remains the second most important export market for German mechanical and equipment engineering. However, despite a recent decline in exports, imports from China have increased significantly. "This is the beginning of a development that could continue and have a significant impact on the economic structures of Germany and Europe," warned VDMA Executive Vice President Alexander Jakschik in a domestic interview on the topic of China in February this year. For many companies, the situation is already serious, and for some, it is even dramatic.

Jakschik considers the large price differences for similar machines as a particularly serious issue. He points out that many Chinese competitors' products are 50-60% cheaper than those from European manufacturers, which puts great pressure on European manufacturers. However, this VDMA vice president emphasized that not every competitive advantage is unfair. Chinese companies are very skilled at manufacturing so-called "good enough" machines — machines that fully meet specific applications without relying on the highest quality. This is precisely what is attractive for many applications. "This is a fair competitive advantage," Jakschik said. Furthermore, China has lower production costs and a vast domestic market, which is favorable for economies of scale.

VDMA Executive Vice President Alexander Jakschik

Meanwhile, Germans also hold clear misconceptions regarding competition with China. These include China’s significantly higher subsidies, which artificially sustain enterprises and lead to overcapacity. This, in turn, triggers ongoing price wars. Additionally, an undervalued currency further reduces the cost of Chinese exports. “These unfair competitive advantages must be addressed,” Jakschik strongly emphasized, yet the focus of solutions must remain on internal reform. Germany and Europe’s mechanical engineering sector still has substantial work to do. “We need to lower our prices, produce more efficiently, and reduce internal bureaucracy,” stated the VDMA Vice President.

Jakschik urged European politicians: "Excessive regulation and bureaucracy must be consistently reduced to enable businesses to restructure. At the same time, companies need to strategically reposition themselves, cut costs, drive innovation, and pursue differentiation more aggressively through services, customer engagement, and specific market segments. In trade policy, Europe must not be naive. Tariffs are not a simple tool—they ultimately always harm one's own economy," Jakschik said. "But if China does not create a level playing field, we must act decisively." He emphasized, however, that such measures must be carefully weighed.