According to a study, China is massively expanding its lead over the former world mechanical engineering export champion Germany.

Chinese exports of machines and systems will increase by almost 31 percent to 296 billion dollars this year, while the German exports will only increase by 13 percent to 249 billion dollars, according to a study by the federal economic development agency Germany Trade & Invest (GTAI) published on Friday by Reuters ).

In 2020, the People's Republic overtook the previous export world champion Germany for the first time, as the industry association VDMA announced at the beginning of July.

But the lead of 6 billion dollars was much smaller than the approximately 47 billion dollars now expected.

"Thanks to Corona, China became the world's largest supplier of machines for the first time in 2020," says the study.

The rapid ramp-up of the industry there after the strict lockdown made this possible.

Numerous restrictions

"The Chinese competition is overtaking German exporters in more and more segments," says the study. Of the 28 sub-segments of mechanical and plant engineering, the competitor was already ahead of Germany in 16 divisions in 2020. "This includes areas in which Germany traditionally exports a lot in terms of value," the experts say. The areas of fittings, conveyor technology, heating, cooling and air conditioning technology as well as mining, structural and civil engineering machines are named.

Compared to 2010, the German mechanical engineering companies increased their global deliveries by 8.7 percent in 2020. "Suppliers from the Middle Kingdom, on the other hand, almost doubled their exports in the same period," according to the study authors. “The trend shows that German exports are likely to lose this segment to Chinese machine builders in the long term.” However, many foreign companies also produce locally in China, including some machine builders.

Beijing wants to achieve technological leadership in selected branches of industry, for which the program “Made in China 2025” was initiated. "The Chinese leadership is intervening in the market by subsidizing Chinese state-owned companies and giving preference to foreign providers," according to the study. Accordingly, German companies report numerous restrictions that have reduced their competitiveness. These include joint venture constraints, difficult access to public contracts and interference in the management of foreign companies by party cadres.