The times where the manufacturing of products in China was cheaper than anywhere else, where cost was no problem but rather a pleasure, these times are quickly ending. It may be that some products will still be produced more cost-effective in China than in Europe for the time being. However, China also has to fight rising costs for resources, with exploding energy costs and rising wages as well as expenditures of the government for infrastructure and environmental protection. And slowly but surely the fight against plagiarism is getting into gear.

Small Asian countries such as Vietnam are beginning to compete with China. And India, China’s big antagonist is attacking on all fronts.

Surely, it’s not quite that easy to defeat the Chinese. It’s not that easy to slow down the Chinese economic miracle. China today is an economic superpower, globally buying into the production of raw materials, exerting influence on the politics of commodity-rich countries, able to intervene with huge monetary reserves in the world trade and directly enter into the sales markets as supplier of high-quality investment and consumer goods. Yet, we Europeans do not have to be too worried that the talk about the ‘yellow peril’ is going to turn into an existential danger for us.

The changes going on in China right now are putting a limit onto the developments in China. The military is becoming somewhat restless, because it is losing economic influence and it wants financial compensation. The poor farmers in Northern China, partially living in squalor, are demanding a more just distribution of the slowly growing prosperity, which in comparison to Western countries is still humble. An exploding national budget is causing great concern, as well as dramatically sinking growth rates for exports and unemployment ranging between 10 and 30%. A large number of state-owned enterprises are bankrupt. And last but not least the party is afraid to lose its power due to the rise of the new, rich class of entrepreneurs and the continuously growing gap between the rich and the poor.

In my opinion, China is losing its reputation as wild conqueror of the markets. China is developing into a competitor who distinguishes itself more through having to face competition and less through being indomitable unattainable and superior. This applies to the whole world and China’s own market which is an advantage for us, because there are tremendous possibilities in the Chinese market. The old German adage ‘competition stimulates business’ is thus becoming up-to-date again.