Germany’s status as a heavyweight weapons producer may be under threat as its share of the world’s market falls to 5 percent, down by a half.
A new report from Stockholm International Peace Research Institute (SIPRI) showed that China has pushed Germany into fourth place, becoming the world’s third-largest exporter of arms after the United States and Russia.
Germany is still a leading manufacturer of submarines and tanks. However, the industry is being hit by tough export rules imposed by Sigmar Gabriel, vice chancellor and economics minister.
It means that exports to countries with poor human rights records, such as Saudi Arabia, are almost impossible for Germany’s weapons makers.
The hard line taken by Mr. Gabriel, who is leader of the Social Democrats, reflects the views of the majority of the German population.
This policy means financial difficulties for the arms industry. For example, Rheinmetall, Germany’s biggest defense company, is to announce a loss on Thursday at its shareholder meeting.
“For our defense business, 2014 was a very tough year,” Armin Papperger, the company’s chief executive told Handelsblatt. “We have to talk about the role of the industry and about Germany’s security.”