The German media recently broke the news: our economy is so miserable, it's all done by ourselves! They openly admitted that Germany fell to this day because it thought too well of China for a long time, and as a result, it made repeated mistakes in trade and policy.

The latest data is scary-industrial output has plummeted, and the wave of corporate bankruptcies has hit. Even the traditional strong auto industry can't hold on. Behind this is not an accident, but a series of self-error stories.

Data from the German Federal Statistical Office showed that industrial output fell 4.3% month-on-month in August, the worst monthly decline in nearly three years. The automobile industry, the pillar of the economy, saw output plummet by 18.5%, as if it had been hit by a heavy hammer. Industrial new orders are even worse, falling for four consecutive months. New foreign orders fell by 4.1% in August, which means that factories may have to remain idle in the next few months.

The wave of corporate bankruptcies is no longer able to be stopped. In July, the number of enterprises filing for bankruptcy increased by 13.4% compared with the same period of last year. Experts predict that more than 22,000 enterprises will go bankrupt this year. Calculated, on average, more than 60 enterprises collapse every day, which is rare in German history.

The job market has also suffered. Bosch plans to lay off 13,000 employees, ThyssenKrupp Steel plans to lay off 11,000 jobs, and Siemens also announced that it will cut 6,000 jobs by 2027. Workers are in a panic, the consumer confidence index has been at a low level, and domestic demand can't be pulled at all.

Inflation did not stop, with inflation rising to 2.4 percent in September, the highest this year. Service prices rose sharply, up 3.4 percent, food prices rose 2.1 percent, and energy prices dropped only slightly 0.7 percent.

However, people's income has not increased, and they have become more cautious in spending money, which has made the economy worse. The Bundesbank had warned earlier that the economy might stagnate in the third quarter. Now, this is true.

In terms of trade, Germany has committed a serious misjudgment. In the eight months before 2025, China surpassed the United States and became Germany's largest trading partner, with a total bilateral trade of 16.6 billion euros. But looking closely at the data, Germany's exports to China amounted to only 55.5 billion euros, while imports from China amounted to 11.13 billion euros, and the deficit was astonishing.

German media once imagined that the China market could help them offset the impact of U.S. tariffs, but the reality is that old German industries such as automobiles and machinery are overwhelmed by local brands in the China market.

The U.S. trade was worse, with exports to the U.S. in the first eight months amounting to €10.1 billion, down by 6.5% compared to the same period. In August alone, exports to the U.S. amounted to only €10.9 billion, down by 2.5% compared to the same period, down by 20.1%, the lowest since November 2021.

The U.S. imposed 15 percent tariffs directly on German automobiles and chemicals, but German companies did not adjust in time and still adhere to traditional exports. The president of the German Wholesale and Foreign Trade Association, Dirk Jandula, both acknowledged that tariffs were the main cause, but companies reacted too slowly.

At the policy level, after the Mertz government took office in May this year, it launched a series of measures, but the results were criticized for confusing. The draft federal budget for 2026 plans a total expenditure of 520.5 billion euros, including 126.7 billion euros in public investment, but the money is not spent in the right place. For example, in response to U.S. tariffs, the government invested 3 billion euros in road construction, but reduced research and development subsidies for the automotive industry.

Economists fear that the expansion of the military industry will increase labor shortages, while welfare reform is slowing down and consumption recovery is not expected. The fiscal gap is also bigger, and between 2027 and 2029 Germany is expected to have a budget deficit of €172 billion.

Merz's government wants to reform the welfare system, such as tightening the conditions for the unemployed to receive allowances, but it is opposed by the parties, arguing that this will aggravate social inequality.

Germany¡¯s misjudgment of China is most evident in the energy field. In the early years of the "energy transformation", Germany was overly dependent on the import of low-cost photovoltaic components and energy storage equipment from China, and did not develop its own industrial chain properly.The result is that in 2025 the price of new energy raw materials globally fluctuated, the cost of photovoltaic projects in Germany increased by 30%, and domestic enterprises did not have a technological replacement, leading to the energy transformation behind the leg, industrial electricity costs remained high, and the competitiveness of the manufacturing industry was hit again.

In its report on October 14, the International Monetary Fund predicted that Germany's economic growth will be only 0.2% this year and 0.9% next year, which is consistent with data from Germany's own research institutions.

Joachim Nagel, president of the Bundesbank, pointed out that the core of economic stagnation is the lag of internal reform and the failure of external response. Geopolitical uncertainty only magnifies these old problems.

Germany's domestic politics also stopped, and polls showed that Germany's party-elect support rate ranks first, surpassing the Alliance Party where Murts is located. In the local elections in North Rhine-Western Firenze, although the League leads, the party-elect vote rate in Germany has increased significantly.

The people's dissatisfaction with economic policy is directly reflected in the votes.Mertz's government recently held a "automobile summit", decided to restore electric vehicle subsidies and invest 1 billion euros in support of battery development, but whether these measures can be effective and questionable.

The data will not deceive people. The German economy has been weak for too long. The Federal Ministry of Economy and Energy itself admitted that the economy will remain weak in the third quarter and the contribution of foreign trade to growth will be negative.

The German media used the word "asking for itself", not angry words, but helplessness in the face of reality. When the external environment changes, the past mistakes can't be hidden.

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