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Carmakers from the EU’s biggest economy suffer decline in Chinese market while China’s models boom in Europe

Europe is buying Chinese hybrid vehicles by the shipload – imports are up more than 400 per cent this year – while Germany’s car exports to China have slumped, leaving gold as its biggest single shipment going the other way.

These are just two findings from new statistics that show how quickly the old trade model has shifted gears, while offering a stunning snapshot of the contrasting industrial fortunes of the European Union and China.

Germany – the bloc’s biggest economy and its manufacturing powerhouse – saw its trade deficit with China shoot up 142.8 per cent to US$17.4 billion in the first eight months of 2025, compared to US$7.2 billion a year earlier.

The findings, part of detailed Chinese customs data released on Saturday, will send alarm bells ringing in Berlin.

Long seen by Chinese buyers and suppliers as a symbol of Germany’s manufacturing prowess, cars remain its biggest industrial export to China, but no longer form the largest single line in the customs data.

In the period to August, saloon car shipments were overtaken by those of unwrought gold – at a time when Germany has no active mines – and medicines, an ironic development which will fuel debate that China is no longer the gold mine it once was for German carmakers.

Alongside plunging combustion-engine passenger car exports which were down 43.9 per cent, from US$7 billion to just US$4 billion over the first nine months, German shipments of automatic gear shifts fell 12.9 per cent, with other car parts down 32.3 per cent.

In addition, industrial machine exports tumbled 16.2 per cent while control instruments were down 25.5 per cent, according to the South China Morning Post’s calculations based on the official data.

A glance at the numbers going the other way shows the depth of the issue for Germany and other European auto manufacturing hubs: as China loses its taste for Western car brands, Europe’s addiction to China’s electric vehicles and batteries is deepening.

Over the first nine months of 2025, China’s shipments of plug-in electric vehicles (PHEV) soared 439.4 per cent in value terms, from US$524 million to US$2.8 billion, as exporters looked to avoid anti-subsidy duties that only apply to pure electric models.

Over the same period, China’s shipments of lithium-ion batteries to the EU’s 27 member states rose 36.6 per cent, as the bloc faced up to the reality of using Chinese motors to power its own electric revolution.

According to the data, Bulgaria’s imports of lithium batteries from China shot up 860 per cent to more than half a billion dollars, while Germany’s imports topped US$9 billion.

Gregor Sebastian, an analyst of China’s industrial economy at Rhodium Group, a research house, said the figures were not surprising.

“China itself saw much faster PHEV growth in 2024, which drove a wave of new model launches now being exported. Economics matter too: exporters will naturally pivot to lower-tariff products if EU demand is there,” he said.

“And demand clearly is – consumers are happy with PHEVs because of range anxiety, and the commission’s recent relaxation of EU emission requirements makes PHEVs even more attractive in the coming years.”

The trend has not escaped EU bureaucrats. Earlier this month, the European Commission said it was “monitoring” the surge in PHEVs from China as part of efforts to establish whether US trade tariffs on Beijing were leading to the diversion of cut-price items to Europe.

According to a commission statement, their trade diversion data “more specifically shows a sharp increase in exports to the EU from China of plug-in hybrid electric vehicles in the last months. Steel products are prevalent in the monitoring as well. This does not automatically mean the increase is harmful to EU industry”.

In an annual State of the Union address earlier this month, Commission President Ursula von der Leyen announced that “we cannot let China and others conquer this market”.

“No matter what, the future is electric. And Europe will be part of it. The future of cars – and the cars of the future – must be made in Europe,” she said.

Nonetheless, the statistics heap pressure on European policymakers and manufacturers alike to support the flagging car industry.

Last week, von der Leyen chaired a third dialogue with the automotive industry, with executives calling for urgent action to help companies cope with the wave of cutthroat competition coming from China.

To the surprise of many, one of the major demands of the car bosses was to drop the EU’s strict phase-out targets for combustion engines, which would delay the bloc’s transition to EVs.

“The rigid car and van CO2 regulation must be adapted to reality,” Ola Källenius, CEO of Mercedes-Benz, said after the meeting. “Being successful means delivering on all core EU priorities: economic security, industrial competitiveness.”

A Chinese business group said that the PHEV wave “should be viewed in perspective, since they still represent only a modest share of the overall market”.

Fang Dongkui, secretary general of the China Chamber of Commerce to the EU, said the expansion of PHEVs reflected both policy dynamics – such as tariffs on Chinese battery EVs – and advances in technology.

“Many of these vehicles now offer ranges exceeding 1,000 km (620 miles), helping to ease charging and range concerns at a time when Europe’s charging infrastructure remains uneven,” he said.

Fang urged EU policymakers to “assess the trend objectively, rather than resorting to further restrictive measures or launching new investigations into Chinese PHEVs”.

EU-China trade tensions remain high. Beijing recently slapped anti-dumping duties on EU pork and brandy imports in a move seen as retaliation for Brussels’ anti-subsidy probe on EVs.

The EU, meanwhile, has banned Chinese medical device makers from lucrative procurement tenders after Beijing refused to open its own market to European firms.

The Post reported last week that a “serious conversation” was taking place in the commission about the maiden use of its anti-coercion instrument against Beijing, potentially in response to what is seen as the weaponisation of rare earth minerals and magnet exports.

Despite the noise, however, the pace of trade investigations has slowed. After a record 20 cases in 2024, the bloc has opened just six in 2025.

After several stormy years, Britain’s biggest luxury brand hosted a star-studded runway show with a 1960s festival spirit

After a stormy decade of profit warnings and flatlining sales, change has been in the air for Burberry lately.

The arrival last year of a new and well-regarded chief executive, Joshua Schulman, has helped to calm the waters following an ill-conceived push upmarket by his predecessors. The former head of Coach has lowered prices in areas such as leather accessories while driving focus around the product Burberry is best known for — outerwear (he has also cut hundreds of jobs). Tongue-in-cheek marketing campaigns featuring British national icons like Kate Winslet and Dame Mary Berry, or TikTok’s Bus Aunty cruising London in a red double-decker, have delighted the internet and helped to revive interest in the brand.

But at a time when virtually every player in the global luxury market is grappling with consumer malaise, will the turnaround efforts prove enough? 

On the eve of its London Fashion Week runway show on Monday night, at least one sign suggested things were heading in the right direction: Britain’s largest luxury brand by sales officially rejoined the FTSE 100. And as a large crowd gathered in the autumn sunshine outside a show tent that had been erected on the lawns of Kensington Gardens — within the grounds of the palace, no less — chatter was louder than ever around whether Burberry might once again become a force: not just in fashion, but in shaping perceptions of British culture around the world. 

No pressure, then, on the shoulders of Burberry creative director Daniel Lee to deliver the goods — and to a star-studded crowd. Those assembled on the front row included Elton John, Joanna Lumley and Jennifer Saunders in a reunion of the ‘Absolutely Fabulous’ duo, former footballer Ian Wright, supermodels such as Naomi Campbell and Rosie Huntington-Whiteley and an entire seating block of Vogue editors flanking Anna Wintour, who sat beside the British tennis player Jack Draper.

Big hopes for blue skies ahead were made abundantly clear — the gargantuan tarpaulin ceiling had been painted so, in the style of JMW Turner. Underfoot was a crumbly dust the colour of chocolate; designed to look like mud but — crucially — not splatter unattractively on to the heel of a fashion-week stiletto. 

Tents. Open skies. (Fake) mud. You guessed it, this season Lee had landed on embracing British festival spirit. Which wasn’t a bad call, per se. Events such as Glastonbury summon religious fervour for millions of people, as well as serving as a cornerstone of the nostalgic 90s Cool Britannia movement. Legendary musical performances, euphoric collective singing, celebrities mingling with ordinary sorts — and everyone dependent on wearing rainproof coats and boots even at the height of summer (this is England, after all). It-Girl Alexa Chung had even set the tone in a dreamy campaign shot released in June wearing pink sequins, a dark parka and rubber Wellingtons in the Burberry signature plaid. 

Only, this wasn’t exactly what came down the runway. It felt as though Lee had more of a 1960s festival culture in mind. So models of both sexes wore sharp and skinny Mod-ish suits cropped at the ankle in shades of ochre, purple and tobacco, and swishy, swinging mini dresses in embroidered crochet, coloured chainmail or entirely woven from tiny beads. Buttoned up biker jackets were worn by long-haired models with their hands stuffed inside the pockets. And of course, trenchcoats also featured — lots and lots of belted trenchcoats — in leather laser-cut to look like paisley lace, buttery soft suede and then shinier variations — mimicking the glistening shimmer of British raindrops — that came in denim and plaid, including a bold cropped and checkered version in green and yellow that opened the show. 

“Musicians have always been pioneers — fearless in the way they dress and sound,” Lee said in the show notes. “A legacy you’ll see in the looks, cast and styling.”

Certainly these felt like looks for performers who wanted to turn heads, rather than those queueing up for the Portaloo. Sun, cloud and flower-power motifs put a bit of a spring in the step of the collection and had hippie echoes, as did the slouchy, oversized suede bags covered in fringing. On the footwear front, boots were chunky and rubber-soled and laced up to the mid-calf, with some backless, chunky-heeled mules or sliders thrown into the mix. 

It was slick and polished, with plenty of outerwear designed to propel the great reset. But it didn’t quite feel like a collection that could guarantee Burberry sun after the rain. The forecast still feels somewhat unpredictable. What could be more British than that?

Authorities call for ‘wartime’ footing and prepare for one of the world’s biggest storms this year

Chinese authorities have called for a “wartime” footing and prepared to evacuate hundreds of thousands of people as one of the world’s strongest storms this year barrelled down on the country’s industrial heartland.

Super Typhoon Ragasa is forecast to pass through China’s Pearl River delta, which is home to some of the country’s biggest technology and manufacturing hubs, on Wednesday morning. Schools, roads and rail lines are being closed.

Weather conditions in the region are expected to deteriorate “rapidly” from Tuesday afternoon, the Hong Kong Observatory said.

A super typhoon is the strongest category of tropical cyclone, with sustained winds of more than 185km an hour. Winds at Ragasa’s centre were as high as 230kph early on Tuesday. They have since moderated to about 220kph, the equivalent of a category 4 hurricane, according to the observatory.

The storm made landfall on the Philippines on Monday, and has prompted warnings as far away as Taiwan.

It will be the ninth to trigger a storm warning in Hong Kong this year. Historically, Hong Kong has recorded an average of six such storms a season, which typically lasts until about mid-November, according to research by the City University of Hong Kong.

The Chinese Communist party secretary for Guangdong province, which borders Hong Kong, told a meeting on Monday to prepare for “an emergency and wartime state”, according to state media.

“We must resolutely win the hard-fought battle of preparing for this typhoon and exert ourselves in reducing the harm caused to a minimum,” said Huang Kunming.

In Dongguan, an electronics manufacturing hub between the provincial capital Guangzhou and tech megacity Shenzhen, authorities initiated “five cancellations” — schools, production, work, operations and businesses — in phases from Monday afternoon.

Similar measures were under way in Foshan, Zhuhai and Shenzhen, where authorities said they had opened 865 emergency shelters and that 400,000 people would need to be evacuated.

State media reported that provincial authorities ordered high-speed and regular trains to begin phased cancellations, with all rail services suspended by Wednesday.

In Macau, authorities said they would close casinos if the city raised its third-highest typhoon warning, which the meteorological agency said was a “high probability”. A mega bridge between Zhuhai, Macau and Hong Kong was also closed.

Hong Kong’s flag carrier Cathay Pacific said it expected to cancel more than 500 flights between Tuesday and Thursday, although the territory’s airport authority said it would remain open.

School classes in Hong Kong were suspended for Tuesday and Wednesday.

Officials directed supermarket chains, including Walmart, and food delivery platform Meituan to increase supplies of essential goods and refrain from price gouging, according to statements issued by local governments.

Trading on Hong Kong’s stock exchange is set to continue during the storm, under a mechanism introduced last year allowing it to maintain operations under adverse weather events.

Flooding is expected in many areas. Officials said sea levels in coastal areas could reach levels comparable to Typhoon Hato in 2017 and Typhoon Mangkhut in 2018, which inflicted hundreds of millions of dollars in economic losses in Hong Kong.

Mark Clayton, finance chief at C2W, a manufacturing company in Zhuhai and south China chair of the British Chambers of Commerce, said that during Typhoon Hato, a tree was blown through his office window.

“We’ve locked [the office] down, wrapped the window handles together, moved everything expensive or important . . . away from windows,” he said. “Now we sit back and wait.”