By Michael Pröbsting, Revolutionary Communist International Tendency (RCIT), 9 July 2026, www.thecommunists.net

A few days ago, the Wall Street Journal (WSJ) published a highly interesting article about how Germany “Mittelstand” – the middle bourgeoisie of that country – suffers from China’s export offensive. This article demonstrates once more the decline of Western imperialism and the rise of its Eastern rival. ^[1]

While goods from the Middle Kingdom conquer an increasing share of Germany’s market, the Mittelstand’s export to China decreases constantly. This is particularly relevant for Germany’s industry – the heart of the country’s economy for more than a century. China’s overall goods exports to Germany alone have jumped 17% this year through May compared with the year prior, and those to the European Union have increased 16%. As a result, industrial output declined by around 10% between February 2022 and early 2026. German industry is losing more than 10,000 jobs every month.

Of particular interest is the fact that China’s rise and Germany’s decline also take place in the machinery sector – the sector where Germany was the leading country for a long time. The WSJ reports that Germany’s trade balance with China in capital goods slid from a surplus of roughly 750 million euros to a €500 million deficit between mid-2024 and August 2025 on a 12-month rolling average. Germany’s machine-tools exports to China slumped by around one-third in the first quarter from a year earlier.

The article also quotes Oliver Richtberg, head of foreign trade at the Machinery and Equipment Manufacturers’ Association – a lobby group whose members employ one million German workers – saying: “Chinese competitors already control one-third of global production in the machinery sector.”

This is an extremely interesting fact. The machinery sector represents the core of what Marx called the sector producing the means of production (in contrast to the sector producing the means of consumption). In other words, it is the sector which builds the machines to build the commodities, or – to put it in Marxist language – the sector which creates fixed capital. Hence, machinery is key for the production of capitalist surplus profit and for increasing productivity.

Controlling one-third of global production in the machinery sector makes China by far the strongest economic power in the world. As the RCIT has pointed out since a number of years, China has become an imperialist power which challenges the U.S. as the hegemon. [2]

China’s domination in machinery is not surprising as its share of world manufacturing output rose from 6% (2000) to 31,8% (2023) and is projected to reach 45% in 2030. In the same period, America’s share declined from 25% to 15% (and is projected to reach 11% in 2030). [3]

In the past, many critics objected to our thesis of China as an imperialist power that its strength in trade was just the result of producing low-tech commodities while Western capitalists would continue to dominate the know-how and the high-tech sectors. This is obviously not the case anymore. Today (and since several years) China successfully competes with Western corporations in high-tech sectors and is now about to destroy the traditional leader in machinery – the German industrial companies.

Splendidly, the WSJ article cites the Centre for European Reform, a London-based think tank, warning in a recent report: “China has already eaten much of German industry’s lunch and is preparing to start on dinner.” A well-said conclusion!