"Germany has been buying more capital goods from China than vice versa – a remarkable turnaround for Europe's industrial engine" [capital goods]
The reversal in capital goods trade flow directly evidences the structural claim that China has transitioned from customer to competitor, displacing German industrial exports at the core product category level.
Reasoning from this article
Germany's case is a leading indicator for other export-oriented industrial economies (Japan, South Korea, parts of the US Midwest) whose growth models were built on selling capital goods and machinery to a developing China. As China's own industrial capacity matures and overshoots domestic demand, it exports the surplus, structurally compressing the addressable market for legacy industrial exporters. The 40%+ GDP-share decline in German exports to China since 2021 quantifies how fast this transition can occur, suggesting other economies face similar cliff edges. Domestic deregulation or fiscal stimulus cannot restore foreign demand that has been structurally captured by a competitor.