What is the bilateral trade relationship between China and Germany? Flows in both directions over thirty years, the composition of each side’s export basket, how similar the two countries’ baskets are, and whether the pair over- or under-trades relative to what size alone would predict.
CHN→DEU 2024$160.5B
DEU→CHN 2024$92.5B
balance (CHN)$68.0B
FK similarity44.8
intensity0.74×
Figure 1
Bilateral merchandise trade, 1995-2024
Combined bilateral flows grew from $18.1B in 1995 to $253.0B in 2024, a CAGR of 9.5%. China’s exports to Germany are $160.5B; flows the other way are $92.5B. Values are f.o.b. from the exporter report in BACI.
Source: CEPII BACI 202501 (retrieved 2026-04-28). Positive = surplus for the exporter in the URL.
Each side’s top products
BACI bilateral aggregates are not disaggregated at the HS6-level in the public product file, so we show each country’s top 15 HS6 exports to the world in 2024 as a proxy for the composition each side brings to this bilateral relationship. This reveals the structural overlap (or lack of it) between the two export baskets.
Figure 2
China: top 15 HS6 products (world exports, 2024)
Figure 3
Germany: top 15 HS6 products (world exports, 2024)
Export similarity
The Finger-Kreinin (1979) export-similarity index measures the overlap between two countries’ export baskets. Defined as FK(a,b) = 100 × Σᵢ min(sᵢᵃ, sᵢᵇ) over HS6 shares, it ranges from 0 (disjoint baskets) to 100 (identical). High FK indicates direct competition in third markets; low FK indicates complementarity and suggests gains from bilateral trade driven by comparative advantage rather than horizontal differentiation.
Figure 4
Finger-Kreinin export similarity between CHN and DEU, 1995-2024
In 2024, the FK index is 44.8 (vs 26.3 in 1995). A rising series means the two export baskets are converging in structure , either because one country is catching up on the other’s comparative advantages, or because both are specialising into the same rising product categories.
Method: Finger & Kreinin (1979) “A Measure of 'Export Similarity' and Its Possible Uses” Economic Journal 89(356): 905-912. Applied over HS6 export shares from BACI.
Over- or under-trading?
The trade intensity index (Brown 1947, Kojima 1964) asks a simple question: does country A send a larger share of its exports to country B than B’s share of the rest of the world’s imports would predict? Formally, I = (Xᵢⱼ / Xᵢ·) / (M·ⱼ⁻ⁱ / X··⁻ⁱ). Values above 1 mean over-trading relative to size; below 1, under-trading. This is the Balassa (1965) revealed- comparative-advantage logic applied to a bilateral partner instead of a product.
Figure 5
Bilateral trade intensity, CHN→DEU, 1995-2024
In 2024, CHN sends 4.5% of its exports to DEU, versus a size-predicted share of 6.0% , an intensity of 0.74×. CHN under-trades with DEU relative to what size would predict, distance, barriers, or alternative suppliers appear to divert flows elsewhere. A full gravity decomposition (Anderson & van Wincoop 2003; Silva & Tenreyro 2006; Head & Mayer 2014, “Gravity Equations: Workhorse, Toolkit, and Cookbook,” Handbook of International Economics vol 4) would control for multilateral resistance, distance, and common language explicitly.
Method: Brown (1947); Kojima (1964) “The Pattern of International Trade among Advanced Countries” Hitotsubashi Journal of Economics 5(1): 16-36. Computed from BACI bilateral aggregates.
The last decade with crisis markers
Zooming into the most recent ten years of combined bilateral flows surfaces the shape of the relationship through the two largest global shocks of the BACI window: the 2008-09 Global Financial Crisis (Baldwin 2009, The Great Trade Collapse) and the 2020 COVID-19 contraction (Espitia et al. 2022, Economic Policy). Marker dots flag each crisis year when present in the window , a visual cue for whether the pair contracted in sync with the world or decoupled from it.
Figure 6
Combined bilateral flow, 2015-2024, with 2008/2020 crisis markers
Over the 10-year window 2015-2024, combined flows compounded at 4.0% a year. GFC impact: 2008→2009 combined flow change -7.3%. COVID impact: 2019→2020 change 6.0%. Rebound 2020→2021: 20.0%. Markers are shown only when the crisis year is inside the ten-year window.
Source: CEPII BACI 202501 (retrieved 2026-04-28), sum of both directions. Crisis-year annotations: 2008 GFC (Baldwin 2009); 2020 COVID (Espitia et al. 2022).
Intensive vs extensive margin of export growth
Hummels & Klenow (2005) decompose export growth into two margins: the intensive margin (growth in existing product lines) and the extensive margin (the net effect of adding new HS6 lines minus dropping old ones). Trade surges driven by the intensive margin reflect scale-up of established production; extensive-margin growth reflects diversification into new goods. BACI bilateral aggregates do not carry HS6, so the decomposition here is applied to China’s HS6 world-export basket , a close proxy for what shows up in the CHN→DEUflow, but not the bilateral flow directly.
In 2024, China’s HS6 exports grew by 5.1% vs 2023: intensive margin 5.1%, extensive margin -0.0%. 8 new HS6 lines appeared, 29 dropped out, and 4587 continued from the prior year. Intensive-margin dominance indicates scale-up of existing specialisations; extensive-margin episodes signal diversification events (new sectors, new reporting, or supply-chain shifts).
How big is the partner, from each side?
A bilateral relationship has two shares, not one: the slice of CHN’s total exports going to DEU, and the slice of DEU’s total imports coming from CHN. Size-mismatched pairs make these diverge sharply. The wedge between the two lines is a structural feature of the relationship and a first-order political-economy variable in bilateral negotiations (Krugman 1991, “The Move Toward Free Trade Zones”).
Figure 8
Partner share from each side, 1995-2024
In 2024, DEU absorbs 4.5% of CHN’s total exports, while CHN supplies 12.1% of DEU’s total imports. In 1995 the same shares were and . Where the two lines diverge, the smaller economy is more dependent on the larger one than vice versa. When they converge, the relationship is balanced in relative weight even if absolute flows differ.
Source: CEPII BACI 202501 (retrieved 2026-04-28), CHN exports to world. HS6 bilateral decomposition not in BACI aggregates.
Source: CEPII BACI 202501 (retrieved 2026-04-28), DEU exports to world.
Method: Hummels & Klenow (2005) “The Variety and Quality of a Nation’s Exports” AER 95(3): 704-723. Intensive = Δvalue in HS6 lines present in both t-1 and t, as share of t-1 total. Extensive = (value of new HS6 in t − value of dropped HS6 in t-1) / t-1 total.
4.8%
2.5%
Source: CEPII BACI 202501 (retrieved 2026-04-28) bilateral flows. Each share is the bilateral flow as a percentage of the relevant denominator country's total trade (all partners) in the same year and direction.