[Global Times special correspondent in Germany Aoki Global Times reporter Li Xundian] Editor's note: Energy costs, external competition and US tariff policies are exacerbating industrial outflows from Germany. Some German media recently revealed that in the past five years, German enterprises have invested more than 200 billion euros overseas every year on average. At the same time, Germany has been left behind by emerging economies such as China in terms of innovation mechanism. The news that German giants such as BASF are accelerating their deployment in the Asia-Pacific market seems to confirm that Germany's status as a "European manufacturing center" is facing a crisis. Some experts told reporters that whether Germany can reverse its predicament depends not only on its internal reform efforts, but also on complex geopolitical variables.

¡°The whole industry cannot see the future.¡±

The latest survey results released by management consulting firm Simon Kohe highlight a worrying trend: 70% of German energy-intensive companies are moving investment overseas. Germany's "Handelsblatt" reported on the 25th that experts warned that if this situation is allowed to develop, it may lead to a significant drop in German industrial added value.

Approximately 240 German companies surveyed were from ¡°German manufacturing¡± industries such as chemical, steel, glass and cement.31% of the companies surveyed said they were actively moving or expanding production outside Europe; 42% said they were ¡°preferring to invest in European countries outside Germany¡± or would delay the implementation of investment projects in Germany.

Industry observers confirmed this dim outlook.Christophe Kantel, Managing Director of German chemical industrial park operator Infraleuna, said that many companies he knows have not fully operated capacity for many years due to insufficient demand, and he regretted that "the entire industry can't see the future."

Yvonne Hanke, a lawyer at Ritter Gent, a law firm that advises energy-intensive companies, also confirmed the trend. She observes that more and more German energy-intensive companies are shifting investment to countries such as China, India or the United States. This trend has posed a serious threat to Germany's status as the "industrial center of Europe."

According to a survey report released by the Bank of France in the second quarter of this year, the traditional growth momentum of the German economy is facing challenges.In the short term, the U.S. Trump administration¡¯s tariff hike will put pressure on exports and increase economic uncertainty.

The report shows that Germany¡¯s gross domestic product remained stagnant between the end of 2021 and the end of 2024, mainly due to a decline in manufacturing exports. Germany¡¯s exports fell by 4.2% between 2022 and 2024, reflecting cost increases and the decline in competitiveness of German industrial goods caused by the rise of Asian competitors in several industries. This is also reflected in the earnings report of German companies. According to the performance report released on August 6, German chemical giant Bayer¡¯s net loss increased six times over the second quarter of this year, reaching €1.9 billion.

Yan Yuan, deputy researcher at the National and Regional Research Institute of the Beijing Language University, told the Global Times reporter that in the short term, this trend will form a hedge on the German government's current economic boost plan, including infrastructure investment, industrial subsidies and other policies may be weakened; in the long run, as a manufacturing industry country, Germany, its economic core competitiveness, employment stability and social problem prevention will face challenges.

German companies face double pressures

The newspaper, after interviewing representatives of some of Germany's energy-intensive industries, that the main factors that led to the problem were mainly the following.

First, energy costs are high. The EU¡¯s climate policy has led to the continued rise in carbon certificate prices, and the cost of paying for each tonne of carbon has become a heavy burden. Although some certificates are currently issued free of charge, companies are increasingly concerned about future subsidies and rising cost pressures. Christian Kurman, head of special chemicals companies, has publicly called for the abolition of European carbon dioxide taxes to ease pressure on.

Second, policy uncertainty has dampened the confidence of enterprises. After the German Bundestag election in early 2025, many companies' expectations for the new government to implement "autumn reforms" gradually faded. According to a survey conducted by the German Federal Association of Small and Medium-sized Enterprises, about 80% of the enterprises surveyed are pessimistic about whether the new government can improve the business environment.

Some of the aid measures that the German government has announced so far are also a ¡°cocktailer salary¡± for. For example, the German government plans to subsidize a total of €6.5 billion in power grid costs for companies in 2026. Chemical Industry Park Operator Antel says that this has little impact on the power-intensive industry. At his company¡¯s Loire Chemical Park, the subsidy amounts to €4.48 million, which is equivalent to only 2% to 3% of the electricity cost of the chemical park.

Third, US President Trump's tariff war is putting pressure on Germany's energy-intensive industries in many ways. European steelmaker ArcelorMittal told the Handeldelle that it was facing a "continued influx of unfair imports from outside the EU." German specialty glass manufacturer SCHOTT has taken the initiative to adjust its investment strategy. The company confirmed that its investment decisions over the past two years were "more conducive to the deployment of production capacity in countries other than Germany." In the future, SCHOTT will continue to promote a model that better serves the local market. Simon Kohe partner Jan Hammer said: "Many energy-intensive companies are now making location decisions."

Fourth, the weak economy has led to a collapse in demand. At present, the German economy has failed to recover: the German central bank expects the economy to stagnate in the third quarter of 2025, which has led many companies to continue to look at low demand expectations and control the scale of production. Some German chemical enterprises have a factory capacity utilization rate of only 71%. According to industry association data, only when the capacity utilization rate reaches about 82%, German chemical enterprises can profit.

The trend of German energy-intensive enterprises to invest abroad is both the inevitable result of the large context of international industry transfer, as the last century, Europe and the United States have shown this characteristic in the wave of globalization; at the same time, it also reflects that the global layout of German enterprises is being pressured by the domestic political and economic conditions and geopolitics.

More than 200 billion euros per year

Regarding the survey results, Weider, co-chairman of the German Choice Party, commented that Germany is significantly losing the appeal of industrial investment. This meant the closure of a large number of German factories and the loss of hundreds of thousands of jobs. Affected cities will face further declines in trade taxes. Some of Stuttgart's automobile industry concentration areas may face the danger of being abandoned, like Detroit in the United States.

Germany¡¯s manufacturing industry is struggling today with high energy prices, fierce foreign competition and the influence of U.S. tariffs on EU products. Germany¡¯s Focus Weekly reports that German companies are increasingly transferring funds overseas, with the last few decades accumulating up to €345.2 billion. In 2024, foreign enterprises invested €232 billion in Germany. Over the past five years, an average of more than €200 billion per year has flown out of Germany. If these funds are invested in modernization of factories in Germany, digital infrastructure construction, start-up support, etc., Germany may have created ¡°economic miracles¡±. In comparison with China and other countries, Germany¡¯s innovation mechanisms have been ¡°very slow¡± ¨C any plan to build a plant in Germany usually takes 5 to 7 years. Today, China has high-speed ra

Handelsblatt believes that as a developed industrial country, Germany now needs to find ways to keep up with the growth pace of other regions, especially Asia. The report quoted a spokesman for German chemical BASF as saying: "Asia-Pacific will account for about 70% of the global chemical market by 2030." BASF is currently building a new integrated production base in Zhanjiang, China's Guangdong province, and claims that it "hopes to put into production in places where it can see continued market growth in the future."

Focus magazine stated that in this comparison, not only is German corporate investment losing a large number, but also a large number of well-trained professionals leaving Germany. Therefore, Germany must quickly resume becoming an attractive investment destination.

According to a report by the Bank of France in Paris, the new U.S. tariff policy against the European Union could increase the current pressure on Germany. Data show that the U.S. is Germany¡¯s core market, with more than 10% of total German exports in 2024 sent to the U.S. Governor of the German Central Bank expects that by 2027, U.S. tariff policies could lead to a 1.5 percentage point drop in German GDP.

He told the Global Times that the trend of domestic investment outflow in Germany will still be influenced by multiple factors in the future, where geopolitics and internal policy are the core variables.