In a fit of bravado in September, Peer Steinbrück, Germany's Finance Minister, chastised anyone who talked down the German economy, dismissing those who warned of recession as “completely irresponsible”.

After two quarters of negative growth, Germany is now in recession, according to the German statistical office. Yesterday it published the data showing that GDP fell 0.5 per cent in the three months to September 30 after a decline of 0.4 per cent in the previous quarter.

More embarrassing than his words was Mr Steinbrück's choice of Shanghai as the venue for his tub-thumping optimism. For Germany, China is the problem because the Peoples' Republic has in recent years been a godsend for German companies that make machinery and electronic equipment. China's sudden and rapid deceleration has pulled the rug from under these exporters.

Unlike the UK, where the economy is driven by credit-fuelled consumption and the service sector, Germany's motor is exports of manufactured goods. Germans did not participate in the global real-estate orgy.

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Germans are not big spenders; they save 10 per cent of what they earn, which is fine as long as everyone else is spending or investing heavily. Export orders were down by 11 per cent from August to September. China accounted for only 3 per cent of Germany's export trade, but the point is the rapidity of recent expansion. In the first seven months of this year, German exports to China of machinery were up by a fifth.

The worldwide consumption binge is over and, more importantly for Germany, manufacturers are reining in their expansion plan. German exports to China fell 2.5 per cent in August and machinery manufacturers report a slide in orders.

The buzz in the world's biggest workshop is beginning to subside and Germany is feeling the decline. It can only hope that the huge infrastructure stimulus package announced over the weekend in Beijing will provide a boost in areas such as railways: Siemens makes locomotives. We in Britain should also hope that Germany's problems are short-lived. Last year we exported more than €40 billion (£34.4 billion) worth of goods to the country.

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