https://www.youtube.com/watch?v=HREbyWS94AY&t=111s
无作者
Germany is in trouble.For decades, the country was the envy of Europe,the continent’s largest and most powerful economy,responsible for manufacturing one in 10 of the world’s goods.But now,all of that is coming undone far quicker than anyone could have predicted.>> Germany is in recession.>> Europe’s largest economy is facing a long-term loss of momentum.>> Third straight year of economic crisis.>> China is really a challenge for the German automotive, land >> The country barely avoided a third straight year of recession,and unemployment has been steadily rising.And when you pull back the curtain just a tiny bit, it’s not hard to see why.Over the last couple of years, its relationship with China,something which once made the country rich, has quietly been turned against it.German exports into the country have collapsed,with manufacturing giants like Porsche losing 61%, of their market share in just half a decade.
Even worse, German’s own manufacturing giants, once famed across the world for their ruthless efficiency, are being crushed on the international stage.
后置定语
~ (for sth)very well known 著名的 SYN renowned
Las Vegas, famed for its casinos
以赌场著名的拉斯韦加斯
a famed poet and musician
一位大名鼎鼎的诗人和音乐家
Chinese auto exports have skyrocketed,growing by 10 times in the last six years,outcompeting a shrinking German industry.It’s a crisis that has brought Europe’s strongest economy to its knees.And while it’s easy to imagine, that this is just something happening, to a particularly, unlucky economy,the reality is what’s going on in Germany today, is really just a warning of what’s to come.As China continues to develop,it’s really only a matter of time until we see the same thing take place, everywhere.So, let’s answer three big questions.How did Germany find itself here?What comes next for Europe’s most important economy?And perhaps most importantly, what does this mean for the entire western world?This is how China killed German manufacturing, possibly forever.copper is trading at all-time highs,and this video is sponsored by copper One Resources.More from them later.
So, I want to show you this chart here.It’s nothing complicated.The line on the top shows China’s GDP, the total size of its economy,which has been steadily growing at between 5% and 10% a year for some time now.But this line at the bottom here,it shows the amount that China has been buying from Germany.And as you can see, it’s way down.And that’s despite the fact that in time China has gotten a lot richer,which in theory means they should be buying more, not less from Germany.And the thing is,we’re seeing this pretty much across every kind of product at the moment.Cars, power generation,electrical equipment.In pretty much every case, China is up and Germany is down.This is a major, major problem.Unlike most other European economies,which are primarily built around selling services, like law and finance to other rich countries,Germany was built on manufacturing.Wolfsburg, for example,a city in the north of Germany, is home to the largest car factory in the world,where more than 60,000.
people work, and nearly a million vehicles roll off the production line every year.
production line → 🚗 → 🚗 → 🚗 → finished car
[I, T] to move smoothly (on wheels or as if on wheels); to make sth do this （使）滚动
(+ adv./prep.)
The car began to roll back down the hill.
汽车开始倒着往山下滑。
The traffic rolled slowly forwards.
车流缓缓地向前挪动。
Mist was rolling in from the sea.
薄雾从海上涌来。
~ sth (+ adv./prep.)
He rolled the trolley across the room.
他推着手推车穿过房间
That single factory produces more cars than the entire United, Kingdom or Italy manages in an entire year.And this isn’t a one-off, either.Germany accounts for over a quarter of Europe’s manufacturing,and exports make up nearly half of its GDP.That’s three times the share in the US, and still well above France or the UK.For decades, this,above all else, was the country’s biggest strength.But today, it’s becoming their undoing.The system dates back to the 1950s, and it merged for one simple reason:nobody could build things as well as the Germans.After the war, West Germany rebuilt its economy around exports,almost by necessity.The country’s domestic market was totally broken,so growth had to come from selling abroad.And what followed was called the Wirtschaftswunder, an economic miracle.The basic model worked something like this.You funnel young workers into apprenticeships rather than university,
building up a deep practical engineering experience.This labor force would then be used to build up hundreds, of small to mid-size manufacturing, firms,all competing with each other to secure space in international markets,making them insanely productive.By the 1970s, made in Germany had become synonymous with reliable,practical products.The exact kind of thing consumers, around the world look for in things like cars and household appliances.It was this exact, model that transformed the country from what was effectively, a war-torn wasteland, into one of the biggest and most productive economies in Europe.But what happens when you introduce a new country into the mix?One which is able to beat Germany at its own game.Well, back in 2000,that’s exactly what a lot of people predicted was just about to happen.It was the year that China, then the world’s most populous country,joined the World Trade Organization.This decision alone, would now allow China to trade, with the rest of the countries.
in the organization, without tariffs,including Europe.At one level,it’s easy to see why people thought this would be a complete disaster, for the German economy.The two countries had both built their economies around selling manufactured, goods to the rest of the world.And China, thanks to their enormous population,cheap labor force,and let’s say some questionable practices around currency manipulation,in theory, had a massive advantage.But at least for a while, the opposite actually ended up happening.From 2000 to 2010,Germany actually saw record growth in the amount that they were selling abroad.A big chunk of which was actually driven by China itself.Despite already being a manufacturing powerhouse themselves,China at the time still wasn’t able to produce the kind of high-end industry, that Germans specialized in,things like cars, heavy machinery,and chemicals.And Chinese consumers were also getting richer.They wanted high-quality products as well, and so Germany made logical sense.
So, over the course of the next decade,the two countries became close trading partners,Germans providing China with advanced machinery and chemicals,while China would provide electronics and toys,along with a massive consumer marketplace, for German companies to sell their products to.Thanks to this relationship with pretty much China alone,Germany saw average incomes grow by more than 16% in a single decade.However,little did they know at the time that this same partnership, that was making their economy the envy of Europe would also be their undoing.And the reason for all of this is a concept called moving up the value chain.Pretty much every story of economic development looks a little like this.Countries tend to start out in farming and agriculture,with the vast majority of the population living at a subsistence level.Then, as agricultural techniques become more productive,people gradually move out of the countryside into the cities,
and start at low-level manufacturing, producing things like clothes or,you know, furniture,a bit like what we’re currently seeing in a country like Vietnam today.Then, as countries get richer,they gradually move up what is known as the value chain,producing more and more complicated products,which in turn fetch better profit margins,which then eventually allows them to move into the most lucrative area of all,services and innovation.And at the start of the 2000s,China was basically at the second stage of this process.At that point,textiles alone made up more than a quarter of China’s total exports,while transportation equipment, cars,trucks, was just 3.7%.So, back then,they weren’t really competing with Germany in any meaningful sense.But, as you can probably imagine,that didn’t last long.Over the course of the next decade,China would rapidly move up this, value chain,getting to the point where they’re in direct competition, with some of the most advanced economies in the world.However,
the craziest part about this whole story, is that a big part of why China was able to advance so quickly, because they literally bought from Germany to learn how to replace them.Through the 2000s,German firms like Centrotherm, sold Chinese solar companies complete turnkey factories,flying in engineers, to install the machines and then training staff on how they worked.Chinese manufacturers, would then take that knowledge, and start building their own versions domestically, at roughly a third of the cost.Within 5 years, they’d cut their dependence on foreign equipment in half,often preferring the homegrown machines by then.Centrotherm, unsurprisingly,went bankrupt, and German panel makers like SolarWorld, and Q-Cells got priced out by the very Chinese firms that they’d helped train.And now today, China makes up over 80% of the world’s solar panel market.Slowly but surely,this process transformed China from an economy, Germany traded with for mutual benefit, into a direct competitor.
And nowhere is this more obvious and clear than the automotive sector.For decades, the German car industry was the pride of the nation.Brands like BMW, Mercedes,and Volkswagen were sold around every corner of the globe.But in the last couple of years,each and every one of these companies, has been rapidly losing ground to Chinese EV companies.In just the last 5 years,most of the big name brands have dropped well over 20% of their market share.And Porsche, amazingly,saw its share price fall by more than half.All the while, the total amount of Chinese exports has exploded,10Xing in that same period.Now, if you go back a decade or so,the German government was already, well aware of how dangerous this was going to be for their economy.In fact, they were even beginning to take some steps to mitigate it.In 2019, their economy minister unveiled a national industry strategy 2030,explicitly framed as an answer to China’s Made in China 2025 plan.
But just as the German government was waking up to this threat,things suddenly got much, much worse.>> Russia’s invasion of Ukraine is sending energy prices soaring.>> Last week,Russia cut gas deliveries to Germany through the Nord Stream pipeline by 60%.>> Europe is facing its worst gas supply crisis ever this winter.>> When Russia invaded Ukraine at the start of 2022,it threw the economy of Europe into turmoil.Before the invasion, Russia supplied around 40% of all gas the EU imported,making it worth about 25% of the continent’s total energy supply.However, in Germany specifically,the situation was far, far worse.The country relied on Russia for 55% of its total gas usage.And because this was largely cut off from the start of the war,prices jumped to nearly 10 times their average from the year before.And as a result, production in Germany’s energy-intensive industries,things like chemicals, metals,and glass, fell by almost 20% in a single year.Not only was the German economy.
uniquely reliant on importing Russian gas to meet their energy needs,but their economy itself was uniquely reliant on having cheap energy.This is BASF’s Ludwigshafen site.It’s Germany’s biggest chemical manufacturing, plant and the largest integrated chemical complex in the world.After the invasion,gas prices hit between five and six times what the company would pay in the US,which absolutely crushed their margins.And as a result,they were forced to lay off thousands of workers, and leave some of their biggest plants idle for months.Now, imagine this same effect,but not just at one plant,but in every single industry across the entire economy all at once.When you keep this in mind,it’s not hard to see why this was the last nail in the coffin, for the country’s manufacturing, base.But of course, waiting in the wings during all of this was China.As you know,the country had spent the last decade moving up the manufacturing, value chain to be able to compete with Germany,but at the same time,
they’d also been completely, obsessed with making sure they generated enough electricity to support this,which meant that by the time that the Russia oil crisis began,they were in the exact opposite position to Germany.Take a look at this graph here.It shows the total amount of energy countries consume each year.And look at this line here.Since the turn of the century, China’s total energy usage has exploded,even overtaking the United States in 2010.In a single year,China added enough grid electricity to match Germany’s entire capacity.But over that same decade,Germany actually saw their own energy production fall.Of course, the more you have of something,usually the cheaper it gets,which gives Chinese companies a huge advantage on the international stage.However, for Germany,the war in Ukraine was a total disaster.The country went from somewhere that was able to produce the best manufactured, goods in the world at decent prices, to now somewhere that was not just outcompeted.
on price by China,but quality as well.And remember, this isn’t some minor industry that we’re talking about.Manufacturing makes up 20% of the German economy.Take that out and their entire model falls apart.And unfortunately for them, this is exactly what we’ve been seeing happening.Up until 2020,the German economy was more or less tracking with its peers, in terms of how fast that they were growing.But since then, as you can see here,they’ve totally flatlined, falling well behind the previous trend.It’s not just the fact that people, in foreign markets have stopped, buying German goods.Even people inside Germany have.The one place that you’d expect to be safe from the China shock is suffering.In 2024,sales fell double digits from Germany’s own flagship brands in Germany itself.Audi, down 21%,Mercedes, 9%.BMW, over 5%.Overall car sales in Germany are still a quarter below pre-pandemic levels.And it’s not because Germans have stopped buying cars altogether,
but because Chinese manufacturers are now eating into the market.Now, since the beginning of the war,the German government has been desperately scrambling to save its economy.In March 2025, the government ripped up its most sacred rule,a cap on the amount that they were allowed to borrow,and announced a major 500 billion dollar investment package,the largest spending spree in the entire history of the country.The money was earmarked for infrastructure upgrades,green energy projects through the climate and transformation fund,and direct support for struggling industries.In theory,an injection of that size should have lifted GDP growth in a positive direction, within a couple of years,bringing the German economy back to life.However, the thing is,at least as of yet, this hasn’t really been happening yet.Since the project was launched,the German economy has basically continued to flatline.Now, the reason why this has actually failed is really pretty basic,and it follows the same logic.
that you can apply to pretty, much any country in the world.And this graph here goes on to explain it.It shows the relationship, between a country’s total energy usage and their income.And as you can see, there are literally no energy-poor,high-income countries.It just doesn’t exist.And again,this all goes back to the simple fact that if you want to make anything,be it manufacturing high-grade industrial machinery, agriculture,or even tech services,you all need energy above pretty much everything else to make it work.The cheaper that energy is, the better tools you can use,and the faster your economy will grow.China clearly understands this,and it’s why the country has been so obsessed with scaling its energy production, so quickly.What this means for Germany, though,is that the government can throw as much money at infrastructure, and subsidies for failing companies,but until they bring their energy prices down, it’ll basically be pointless.And to be fair, they have been trying to do this.
The country has set a target of generating 80%, of its electricity by renewables by 2030,nearly tripling its solar capacity and doubling onshore wind.But as you might expect, these projects have been mired in red tape and delays.Suedlink, 700 km of cable meant to carry northern wind power south,was originally supposed to be finished by 2022.But now it’s not expected to be done until 2028, 6 years late,mainly due to years of lawsuits and environmental protests.Compare that to China,which is currently building over 1,300, km of similar ultra-high voltage lines under a single 5-year plan,nearly 20 times the length of Suedlink.On the current trajectory,it looks like this problem is only going to get worse for Germany.However,that also raises a much bigger, and perhaps even more worrying question for the rest of the Western world.Remember, throughout the 2000s,Germany wasn’t particularly worried about China.If anything, they did the opposite,freely exporting their products to the country.
in an exchange for floods of cheap consumer goods in return.It was only as China slowly crept, up the value chain that they, began to cause Germany, serious, issues.But it would be pretty naive to assume that China is just stopping there.In fact, it seems almost inevitable that as the country continues to develop,it will slowly creep into the, industries that the most rich, Western countries pride themselves, on:finance, law,technology.We’re already beginning to see the start of this with AI.While US labs still hold the lead in terms of the most advanced models,the truth is that this gap has been slowly closing for a couple of years now.Even more importantly,Chinese companies have a massive edge when it comes to cost,a strikingly similar situation, to what we’re seeing in the manufacturing industry.And it’s not hard to imagine that in a decade or two,we’ll be seeing the same China shock which happened to Germany, happen to the rest of the developed world.And remember,
China alone has a bigger population than the United States and Europe combined.That means that the country could, easily occupy several stages, of the value chain, all at once,competing not only at high-level manufacturing,but services and even agricultural work all simultaneously.There’s a bit of a saying going, around at the moment that China, is what you get in a country, run by engineers,while Europe and America is what you get in a country run by lawyers.Personally, I think that’s a little bit oversimplistic or overdone,but there is definitely grains of truth across this argument.For decades now,China has been building things, at a scale that the Western world, isn’t even close to matching.For a good amount of time,there was this view that because China wasn’t a democracy,they’d never be able to compete with the West, when it came to things like high-end manufacturing, and services.But if anything, what we’re seeing today is the opposite.
Now, that’s not to say that the Chinese system isn’t without its flaws.The country is also facing massive challenges, from demographic decline to massive regional debt to low consumer spending.But there’s also no question, that there’s a huge amount that, the Western world can learn from, these Chinese systems.In particular, the speed at which they’re able to do things.There’s no question that soon enough,China will be directly, competing with the Western world at pretty much everything,which gives it a simple choice: adapt or lose.So, this is something that I’ve been thinking about a lot recently.And once I understood the basic math around it,turning bullish on copper wasn’t just an opportunistic trade,but it’s become the single most asymmetric setup to deep dive into.You’ll need to conduct your own due diligence and do your own homework,but the global economy is colliding with an immovable physical reality.To satisfy basic 3% global GDP growth,
humanity must extract as much copper in the next 18, years as we mined over the past 10,000, years combined.As legendary mining billionaire Robert Friedland bluntly warned,we’re heading for a train wreck.it.There’s no rational price for something you absolutely must have.The US and China are locked into an aggressive cold war over critical metals.China controls the refining bottlenecks,while the West is aggressively deploying tariffs, sovereign stockpiles,and emergency funding to secure domestic supplies.As Friedland stated, “Military demand for this metal is going to go to infinity.copper is really a national security issue.New world-class mines take 15 years to permit and build.Global stockpiles are dangerously depleted,and physical demand is essentially infinite,while supply is pinned to the wall.” copper One Resources, ticker CEXYF,is our amazing sponsor for today’s video, and it’s available on Schwab,Fidelity, Interactive Brokers,E*TRADE,
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