China’s export surge threatens Europe’s economy and forces Goldman Sachs to predict GDP losses across major EU states.
Rising Chinese competition hits Germany, Italy, France, and Spain as EU policy responses remain weak.
Beijing renews its export-led recovery and intensifies global trade rivalry that strains European industries.
Goldman Sachs cuts its European growth forecasts because China pushes harder into global markets.
Giovanni Pierdomenico warns that increased Chinese goods supply widens the eurozone trade deficit with China.
He states that stronger Chinese export pressure reduces eurozone GDP by about 0.5% by late-2029.
Goldman Sachs calculates that Germany absorbs the largest impact with a 0.9% GDP decline over four years.
The bank expects Italy to suffer a 0.6% drop, while France and Spain each take about a 0.4% hit.
The scale of substitution between Chinese and European goods intensifies the strain on Europe.
Goldman Sachs notes that eurozone exporters lose up to four percentage points of market share to China.
For every one dollar that Chinese exports rise, European exports fall by twenty to thirty cents.
This substitution effect steadily erodes Europe’s competitive strength.
Europe Weighs Limited Options
The EU launches resilience initiatives such as the Critical Raw Materials Act and the AI Continent Action Plan.
Goldman Sachs doubts these measures deliver meaningful protection against China’s advancing export machine.
Filippo Taddei argues that Europe’s own vulnerabilities restrict its ability to respond.
Goldman analysts warn that Europe relies heavily on China for essential industrial inputs.
They state that targeted action against Chinese products remains possible under controlled conditions.
They add that broader limits on Chinese supply could clash with Europe’s dependence on Chinese materials.
They stress that the EU continues to face structural reliance on foreign suppliers.
The bank warns that available funding fails to match Europe’s ambitious industrial goals.
Experts claim that timid action from Brussels accelerates the erosion of Europe’s industrial base.
Chinese firms expand their presence in global markets as Europe hesitates.
Analysts argue that aggressive tariffs or import limits could disrupt essential supply chains.
Europe must balance deterrence with caution to avoid harming its own industries.
A Crucial Test for Industrial Strategy
Goldman Sachs highlights defence as the only EU area backed by significant funding commitments.
The bloc’s Readiness 2030 programme gains €150 billion in loans through the Security Action for Europe scheme.
This defence plan contrasts sharply with other EU initiatives that still lack resources or momentum.
Even defence ambitions depend on Chinese supplies of rare earth elements for advanced systems and electronics.
Analysts warn that Europe cannot achieve strategic autonomy without greater self-reliance.
They argue that Europe risks losing ground in sectors it once dominated.
They avoid calling for full protectionism but demand a more unified industrial response.
Policymakers face urgent questions about Europe’s ability to secure industrial sovereignty.
They must decide how long fiscal support and consumer resilience can offset rising global headwinds.
