The reasons why China can produce so much cheaper than Germany are because Germany pays fair wages, has to get enough taxes to pay for free healthcare and the welfare system, provides free access to education (including universities), has very high environmental standards, ...

You may be calling a social democracy "soul-crushing capitalist system". I call it home (not Germany specifically but also a social democracy), freedom for everyone to follow their dreams (you can be completely poor and still study whatever you want (with a side job if subsidies aren't high enough) to get the job you want).

When I need medical help I go to the hospital (or even call an ambulance if it's urgent), get treated, and leave without having to pay anything. For university I'm paying 27€ (~30$) per semester. On the streets you barely see homeless people because there are places where they can go to find food, shelter and advice. Etc.

Paying 50% of my income (only like 30% when not earning that much) in taxes is well worth it. Sure, private insurance might be better for me personally. But it brings me joy to be able to support this system, all those happy people are well worth the slight extra cost.