The German Mechanical Engineering Industry Association (VDMA) stated in a release that Chinese competitors received substantial government subsidies, and some products exported to Europe do not comply with EU technical standards. The VDMA is urging German and European policymakers to implement measures ensuring a level playing field for European and Chinese companies.

VDMA Chairman Bertram Kawlath emphasized that Europe has long demanded fair competition, but this call has been ignored by China, rendering 'fair competition' an empty phrase.

'Thus, we now demand effective measures to enforce fair competition at least within the EU internal market. Our companies have suffered from continuous violations by China in the international trade arena,' he stated.

Specifically, the VDMA recommends imposing countervailing duties on imported products that violate EU anti-subsidy and anti-dumping regulations, strengthening market oversight, and penalizing certain Chinese manufacturers exporting machinery that does not meet EU technical standards to Europe. Companies with a history of non-compliance must obtain third-party certification before exporting products to Europe, and repeat offenders should lose their qualification to export to the EU.

On the other hand, the VDMA calls for the EU to enhance the competitiveness of the local machinery manufacturing sector to avoid future dependence on China. The statement notes that the EU should adopt 'industrial policy measures' to support strategically important technologies in defense, climate, and energy sectors. It also urges that government procurement not only consider price but also evaluate the reliability of suppliers and properly incorporate 'local production ratios.'

This industry organization, which encompasses over 3,600 machinery manufacturing firms, warns that although many German companies still hold a slight technological advantage over their Chinese counterparts, the sustainability of this advantage depends on government support for industry innovation, particularly in research and development. Furthermore, the EU must ensure that government-funded R&D outcomes do not inadvertently leak to countries like China.

The VDMA also demands that the German government clarify which machinery products should be restricted for export to China. 'The current uncertainty has disrupted deliveries to the Chinese market, and approval processes often take several months. Especially as Chinese competitors are now capable of producing comparable products,' it noted.

Securing voice in establishing technical standards, accelerating free trade agreements with countries outside China, reducing bureaucratic obstacles, and lowering the corporate tax burden were also among the demands listed in this statement. Prior to issuing this statement, the VDMA discussed the challenges posed by Chinese competitors with many of its member companies and the political support they hope to receive.

In the first quarter of this year, the delivery volume of Germany's machinery manufacturing industry to China plummeted by 12.2% compared to the same period last year, amounting to only 3.99 billion euros. The international market share of the German machinery industry slightly decreased from 15.2% during 2013-2023, whereas China's share surged from 14.3% to 22.1%.

Earlier this year, VDMA's General Manager for China, Claudia Barkowsky, stated in an interview that the prices offered by Chinese competitors are 'sometimes 50% lower, or even more,' making it increasingly difficult for German machinery engineering companies to win in competition. A survey by the German Chamber of Commerce in China (AHK China) also revealed that more than half of the German companies operating in China expect their Chinese competitors to become the innovation leaders in their industry over the next five years.