German medium scale industries lose markets to imports from China 2026. For the first time Gemany imports more capital goods from China thanit exports there. The Mittelstand or midsize companies were the backbone of the German economy and thrived on exports which are now at risk from Chinese exports of capital goods at much lower prices. The result is layoffs in many of these companies in towns across Germany. Germany's machine tool exports to China are down by 30% in the first quarter of 2026. About 10,000 jobs are lost every month in Germany as a result of this stiff competition in price and quality. Industrial output in Germany is about 10% less in 2026 compared to 2022 and 15% less in energy intensive sectors.