Germany’s economy has long relied on the Mittelstand, a loose network of small and medium‑sized firms, many family‑owned, that lead niche markets.

Bertram Kawlath, chief executive of Schubert & Salzer, exemplifies the sector. With 150 employees and €50mn in revenue, the firm produces valves used in Formula 1 and the Las Vegas Bellagio Fountains.

Yet Chinese rivals grow daily. The VDMA reports an 8 % drop in German machinery exports to China last year and the same decline so far this year, while imports up 14 %. A DZ Bank survey shows only 52 % of SMEs plan to invest in the next six months.

Kawlath cites high corporate tax, labour costs, and “gold‑plated” EU rules as barriers, and calls for faster, flexible policy to counter dumping and subsidies. He urges China to open public tenders, and stresses that Germany must reform its industrial base to safeguard security and competitiveness.