Germany’s striking success at selling cars to China covers over a digital skills deficit that will be very hard to make up.
Jack Ewing and Melissa Eddy
During her 16 years as Germany’s chancellor, Angela Merkel has become an international avatar of calm, reason and democratic values for the way she handled crises that included a near financial meltdown of the eurozone, the arrival of more than 1 million migrants and a pandemic.
Today Germany is an economic colossus, the engine of Europe, enjoying prosperity and near full employment despite the pandemic. But can it last?
That is the question looming as Merkel prepares to leave the political stage after national elections on Sunday. There are signs that Germany is economically vulnerable, losing competitiveness and unprepared for a future shaped by technology and the rivalry between the United States and China.
During her tenure, economists say, Germany neglected to build world-class digital infrastructure, bungled a hasty exit from nuclear power, and became alarmingly dependent on China as a market for its autos and other exports.
The China question is especially complex. Germany’s strong growth during Merkel’s tenure was largely a result of trade with China, which she helped promote. But, increasingly, China is becoming a competitor in areas like industrial machinery and electric vehicles.