'Made in China' is the new 'Made in Germany' — you just have not noticed yet

BYD has just overtaken Tesla.

Worldwide.

CATL controls 38% of the world’s electric-vehicle battery market. Eight of the ten biggest battery manufacturers? Chinese. China builds more high-speed railway lines than every other country combined. DJI controls 90% of the consumer drone market.

Yet ask most people what “Made in China” means, and they say: cheap plastic junk. Counterfeits. Things that fall apart.

But we have seen this before. A hundred and fifty years ago. With Germany.

The parallels are almost frightening. An emerging industrial power accused of copying and counterfeiting. A humiliating public scandal exposing quality problems. A systematic turn towards technical education and manufacturing excellence. And finally — a label intended as a warning that became a symbol of quality.

Germany’s transformation took about 15 years. China’s roughly the same.

Most people have not grasped it yet.

Germany: from thieves to engineers

In the mid-19th century, Britain was the undisputed workshop of the world. Half of global industrial output. Two thirds of all “new technology” industries. Manchester’s textile mills and Sheffield’s cutlery workshops supplied every continent.

Germany’s strategy for catching up?

Theft.

Alfred Krupp — known in British business circles as the charming “Mr. Schroop” — visited English steelworks on so-called “study trips”. He systematically copied their production methods. German companies engaged in industrial espionage, stole ideas, counterfeited products and forged quality certificates. The whole playbook.

Sheffield bore the brunt. German manufacturers in Solingen stamped “Sheffield Made” on scissors and knives. In 1855, W. & S. Butcher won 5,000 dollars in a lawsuit against a German exporter selling fake files and chisels with their trademarks.

Sound familiar?

The Philadelphia scandal

The turning point came at the World Exhibition in Philadelphia in 1876.

Franz Reuleaux, a respected Berlin professor and the official German commissioner at the exhibition, sent letters home to the National-Zeitung. His verdict was devastating: German industry operated on the principle of “billig und schlecht”.

Cheap and shoddy.

The letters caused a national scandal. London’s Times wrote that “excitement is increasing”. The New York Times ran headlines about “Germany’s inferior products”. Even thirty years later, Reuleaux’s obituaries mentioned the phrase.

German industry took it as a personal insult.

And then did something about it.

The turnaround

Germany already had technical universities — Karlsruhe, Munich, Dresden. But after Philadelphia, engineering education became a national priority. In 1899, Kaiser Wilhelm II gave technical universities the right to award doctorates. For the first time, engineers had the same academic standing as classical scholars.

The results were dramatic. By 1913, the German chemical industry employed almost 9,000 scientists and controlled more than 80% of global dye production. Carl Zeiss dominated precision optics. Siemens led electrical engineering. BASF revolutionised chemistry.

Industrial output increased fivefold between 1870 and 1914. Germany overtook Britain in steel production in the 1890s. Around 1900? Europe’s largest economy.

The brand that turned against its creators

Most people do not know this.

In 1887, Britain passed the Merchandise Marks Act. Its aim was simple — require all foreign goods to carry a country-of-origin label. “Made in Germany” was meant as a warning. A badge of shame. Buy British, not this German rubbish.

German manufacturers initially tried to cheat. Put labels on the underside of heavy objects. Used lettering that was too small. Labelled only the packaging.

But within a decade, something strange happened.

German quality improved so much that manufacturers began using the label voluntarily. “Made in Germany” was no longer a warning. It was advertising.

In 1896, British journalist Ernest Williams published a bestseller called Made in Germany. Six editions in a single year. His message to British readers: “England’s industrial glory is departing, and England does not know it.”

He documented German products appearing throughout British homes — tools, toys, dishes, pencils, water pipes. Everything.

The British tried to protect their market. Instead, they created a brand for the competition.

China: from melamine to market leadership

2007 was China’s Philadelphia moment.

That year, 467 types of Chinese toys were recalled in the USA. Lead paint on Thomas the Tank Engine. Dangerous magnets in millions of toys. Chinese products accounted for 60% of all American consumer-goods recalls — and 100% of toy recalls.

And it got worse. Toothpaste contaminated with antifreeze chemicals. Suspect seafood. Pet food containing melamine that killed animals across America. The 2008 milk scandal poisoned infant formula nationwide.

A Chinese government audit found safety defects in 20% of toys made for the domestic market.

“Made in China” hit rock bottom.

Where China leads today

Fast-forward to 2025.

Electric vehicles. BYD sold 4.27 million vehicles in 2024 — up 41% year on year. It overtook Tesla as the world’s largest electric-vehicle seller. China’s five biggest carmakers control 43% of the global electric-vehicle market.

Batteries. CATL holds 37.9% of the global market — the only company above 30%. Eight of the ten largest manufacturers are Chinese companies. China supplies 93.5% of the world’s energy-storage batteries.

Solar panels. More than 80% of global production at every stage. China exported 236 GW of panels in 2024. Since 2011, it has invested 50 billion dollars in capacity — ten times more than Europe.

High-speed rail. More than 50,000 kilometres of track. More than all other countries combined. More than 70% of the world’s high-speed railway is Chinese.

Drones. DJI controls 90% of consumer markets and 70% of commercial segments.

Shipbuilding. China secured 74% of global orders in 2024. Seven of the ten largest shipyards are Chinese.

This is not catching up. This is dominance.

The Luoyang Bearing story

One company captures the transformation perfectly. Bear with me — it is about bearings, but it matters.

Luoyang Bearing Group was founded in 1954 as part of China’s first five-year plan. For decades, China imported 100% of its precision bearings — critical components inside tunnel-boring machines, wind turbines and high-speed trains. Sweden’s SKF, Germany’s Schaeffler and Japan’s NSK dominated. Complete dependence.

In 2007 — the same year as the toy recalls — Luoyang’s tunnel-boring-machine bearing project entered China’s national high-tech research and development programme. By 2019, it had produced China’s first main bearing for an 11-metre-diameter tunnel-boring machine.

Import dependence: ended.

Today, high-end products make up 70% of Luoyang’s output. Bearings for wind turbines. High-speed rail components. Aviation applications. During the current five-year plan, it achieved 13 technological breakthroughs validated internationally.

President Xi visited the factory in May 2025. The message was clear: this is what technological self-sufficiency looks like.

Where China still lags behind

But this is where the German parallel breaks down. For now.

Semiconductors

China’s most advanced chipmaker, SMIC, mass-produces using 7nm technology. Taiwan’s TSMC? Already at 2nm, with the next generation of manufacturing at the end of 2025.

The bottleneck is fundamental. ASML is the world’s only manufacturer of EUV lithography machines — the equipment needed for leading-edge chips. These machines contain more than 100,000 components from 5,150 suppliers across several continents.

China has never received a single one.

Export controls have blocked every sale since 2019. A Chinese prototype reportedly completed testing in early 2025, but has not yet produced working chips. Realistic estimates put domestic EUV production around 2030 at the earliest.

And for EDA software — chip-design tools — American firms Synopsys, Cadence and Siemens control 78–80% of the Chinese market. Domestic self-sufficiency is only 10%.

Aircraft engines

This is even worse.

The WS-15 engine for China’s J-20 fighter has been in development for more than 30 years. Thirty. It reached initial operational capability only in 2025.

Chinese military engines have a service life of around 1,500 hours. Western equivalents: 6,000 hours. A fourfold difference.

For commercial aviation? The COMAC C919 — China’s answer to the Boeing 737 — flies with French-American CFM LEAP engines. China’s domestic alternative, the CJ-1000A, has been in development since 2009 and is not expected to enter service until the late 2020s.

Only five C919s were delivered in the first half of 2025. The target was 50 a year.

The perception gap

And this is where it gets interesting.

Germany’s transformation from “cheap and shoddy” to engineering excellence took about 15 years — from the 1876 Philadelphia scandal to voluntary “Made in Germany” labelling in the 1890s.

China’s transformation from the 2007 quality crisis to dominance in electric vehicles, batteries and solar? Roughly the same. 15–18 years.

But perception lags behind reality. Always.

In the 1890s, many British consumers still thought German goods were inferior — even as German products flooded their markets. Their mental model was stuck in 1876.

Today, most of the West still operates with a 2007 mental model of “Made in China”. Cheap toys. Lead paint. Contaminated food.

Meanwhile, the Chinese company making the battery in their electric vehicle also makes the battery in their laptop. Their phone. And increasingly — their car.

What it means

I am not claiming China has “won”. The gaps in semiconductors and aircraft engines are real — and may prove much harder to close than those in batteries or solar panels.

You can pour money into battery factories. You cannot easily replicate an ecosystem of 5,150 specialised suppliers that took Western firms decades to build.

But the trajectory is clear.

Germany in the 1880s was an emerging industrial power everyone dismissed as copycats making cheap rubbish. By 1914, it was Europe’s largest economy, with world-leading companies in chemicals, optics and electrical engineering.

China in the first decade of the 21st century was the world’s factory for cheap consumer goods. By 2025, it dominates electric vehicles, batteries, solar, high-speed rail, drones and shipbuilding.

The British introduced “Made in Germany” to protect their market. Instead, they created advertising for the competition.

Anyone who sees “Made in China” today and automatically thinks “cheap” may be making the same mistake.

A question

So where does that leave us?

Germany completed its turnaround across almost every manufacturing sector. China’s revolution is different — dominant in some areas, a generation behind in others. Semiconductors and jet engines may define its limits. Or perhaps not. Hard to say.

History suggests that perception eventually catches up with reality. Usually, it takes about a decade longer than it should.

The Germans went from “billig und schlecht” to the global gold standard of engineering. Whether China completes the same journey — or hits a wall with chips and turbochargers — is honestly unclear.

But one thing is clear.

People still operating with a 2007 mental model of Chinese manufacturing? They are not seeing clearly. And in business, investment and geopolitics — failing to see clearly has consequences.

The British learnt that the hard way.