Did Germany's refusal to buy cheap Russian energy and growth of China cause deindustrialization of Germany?
Yes, the end of cheap Russian energy and rising competition from China are significant contributing factors to Germany's deindustrialization. The loss of affordable Russian gas has drastically increased energy costs for German manufacturers, while China's growing industrial and technological competitiveness, particularly in key sectors like automotive, has eroded German market share and profitability. These issues are compounded by Germany's slow energy transition (Energiewende) and other structural challenges.
Impact of the loss of Russian energy
Higher energy costs: Germany was heavily reliant on cheap Russian natural gas for its energy-intensive industries. After Russia cut off supply, energy prices soared, making it difficult for German manufacturers to compete.
Business model disruption: The loss of cheap energy has fundamentally damaged the business model for many German companies, especially in the chemical and steel sectors.
Shift away from cheap energy: While Germany has sought alternative energy sources, including more expensive liquefied natural gas (LNG), this has not fully compensated for the loss of the pipeline gas.
Impact of Chinese competition
Market share erosion: Germany's automotive industry, a major pillar of its economy, is struggling to keep pace with the rapid advancements and lower costs of Chinese rivals.
Forced technology transfer: German companies have been pressured to form joint ventures in China, which has led to the transfer of crucial technology to local competitors.
Factory closures: Some German automakers have been forced to shut down factories in Germany for the first time due to intense competition from Chinese manufacturers.
Other contributing factors
Slow energy transition: The simultaneous shutdown of nuclear power plants and a slow rollout of renewable energy infrastructure, even after decades of investment, has created an energy supply gap and further driven up costs.
Structural issues: Other contributing factors include burdensome regulations, an aging workforce, and a slow digital transformation.
“Many East Germans are more sympathetic toward Moscow than their western compatriots, reflecting decades of Soviet ties and disillusionment since reunification.
When Judith Enders was a young girl in the dying days of the old East Germany, she would walk her dog in the forest, where she would often encounter young Soviet soldiers fishing at the local lake.
“We couldn’t really talk and mostly communicated by gesturing, but we clearly liked each other,” Ms. Enders said, recounting how the soldiers — who were occupying her country — shared their catch with her dog and gave her little chocolates, whose wrapper featured the iconic Russian bear Mishka.
Today she teaches political science at the Alice Salomon University of Applied Sciences Berlin. “We saw them as our friend, our big brother,” she added, with a smile that indicated how naïve that was.
She told the story to help explain why many people in the former East Germany still hold a lingering affinity for Russia.
Thirty-five years after German reunification, that nostalgia continues to be fueled by the failure to fully integrate the east, where even today citizens are still poorer and more likely to be unemployed than their compatriots in the west.
The Berlin Wall is gone and the heavily mined no man’s land that once divided the country has been turned into a nature preserve. But when it comes to attitudes toward Russia, the border between east and west remains remarkably clear.
Many in East Germany have a more nuanced view of the conflict in Ukraine and are cautious about backing Ukraine or imposing sanctions on Russia.
Polls show East Germans are less likely to favor military aid or NATO membership for Ukraine and are more likely to believe that Kyiv should give up land for peace with Russia. More in the East also believe that the West and Ukraine carry some of the blame for the conflict.
This persistent sympathy has complicated the German government’s efforts to counter the imagined Russian threat, and it has allowed the far-right Alternative for Germany party to win over voters in the east with what it bills as pro-peace, anti-armament campaigns.
The East German view is part of a varied landscape of opinion toward Moscow in the states that were once part of the Soviet empire. Rulers of Poland and the Baltic States are, for instance, much more hostile to Moscow while Hungary has been sympathetic.
But if East Germany were still its own country, it would be among the most understanding of Russia of the former eastern bloc states in northern Europe.
Some experts say this has as much to do with developments after German reunification as it does with the ties that built up over decades of Soviet occupation.
Jörg Morré, a historian who has specialized on German-Soviet relations, calls the phenomenon a “post-Socialist community of shared destiny.”
Time has made hearts grow fonder, he said, especially as reunification and the ascent of a Western capitalist system failed to live up to its promise for many.
But what made the former East Germany unique is that its citizens could look to their wealthy compatriots in West Germany for immediate comparison — and overwhelmingly felt that they had lost out. When they started to feel like losers from reunification, a new kinship with Moscow was born.
Silke Satjukow, a German historian, says that the abrupt Soviet exit, which was completed by 1994, made matters worse by undoing the established local economy.
The fact that the withdrawal was peaceful, however, also helped prepare the ground for today’s nostalgia.
The general view has become rosier, Ms. Satjukow said, partly because people were now free to project their own values and hopes on their former occupiers. “We still have the idea that the Russians are our friends, and this idea was able to survive because we’ve not been able to verify,” she said.
Steffen Mau, a sociologist who has studied German reunification, said that East Germans today tend to have limited contact with Russians, so their views are based on an era just after the collapse of the Soviet Union when Moscow was aspiring toward an open and democratic society.
“I do believe that it is a form of Soviet nostalgia, and East Germans have not realized that the character of the Soviet Union, of old Russia, has changed dramatically since the 1990s,” he said.
Even after events in Ukraine, sympathies in the east for Russia remained strong, recalled Dr. Morré, the historian, who is also the director of a museum in East Berlin on the site of Germany’s final World War II capitulation.
The museum has a permanent exhibition on Nazi war crimes committed during the German invasion of Russia and has long been a focal point for German-Russian comity.
When he decided to raise the Ukrainian flag in solidarity, he said, the reaction from neighbors and museum patrons was clear: “We want you to take that flag down.”” [1]
1. Why Germany Is Still Divided When It Comes to Russia. Schuetze, Christopher F. New York Times (Online) New York Times Company. Nov 7, 2025.
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