Les Parisiens twice led the Bundesliga 2 side through goals from Hervin Ongenda and Jean-Christophe Bahebeck.
But the Ligue 1 champions tired as the game went on, with Terrence Boyd, Yussuf Poulsen and Denis Thomalla scoring before a late own goal from Marquinhos made certain of the defeat.
However, despite the defeat, Blanc felt that his side were demonstrating good progress ahead of their upcoming Asian tour beginning later this month.
"It was a very difficult match, especially in the second half," the 48-year-old told the club's official website.
"No doubt the German team felt physically stronger than us as the game went on. There's not much more to say, really. We now move on, and keep working, to prepare for our tour of Asia which is coming up very quickly."
Zlatan Ibrahimovic, who featured for the first time in pre-season, remained positive about the fixture, describing it as excellent preparation for his side's Ligue 1 defence.
"I felt good in this friendly," the Sweden striker said.
"It was important for me, to keep working on my fitness because I had a long holiday. I have to keep working. I felt good out there, it's a great stadium, a great atmosphere and we were against a very good team."
PSG now face Nice on Wednesday as they continue to warm up for next season.