China’s export surge pressures Europe, and Goldman Sachs warns of GDP losses in Germany, Italy, France, and Spain.
Beijing’s renewed export drive increases global competition, straining European economies and weakening their trade positions.
Goldman Sachs cuts European growth forecasts, citing intensified competition from Chinese goods.
Economist Giovanni Pierdomenico warns that rising Chinese exports could expand Europe’s trade deficit and weaken its global competitiveness.
He predicts that euro-area GDP will fall roughly 0.5% by 2029 due to China’s export growth.
Germany faces the largest impact, with GDP expected to drop about 0.9% over four years.
Italy could lose 0.6%, while France and Spain may each see declines of around 0.4%.
Europe suffers from strong substitution between Chinese and European products in international markets.
Goldman Sachs notes eurozone exports lost up to four percentage points of market share to China over five years.
For each extra dollar China exports, European exports fall 20–30 cents.
This displacement steadily erodes Europe’s competitive advantage.
Europe Struggles to Respond
The EU launches measures like the Critical Raw Materials Act and AI Continent Action Plan, but Goldman Sachs doubts their effectiveness.
Analyst Filippo Taddei says Europe struggles to react due to structural vulnerabilities.
Europe relies heavily on China for essential raw materials, limiting its options to curb Chinese exports.
Targeted actions might succeed, but broad restrictions could disrupt supply chains dependent on China.
Goldman analysts note structural dependence persists despite EU programs and that available funding falls short of ambitions.
Experts warn a timid EU response risks further industrial erosion, while overly aggressive measures could backfire.
Defence Spending Shows Industrial Limits
Goldman Sachs notes defence is Europe’s only policy area with substantial funding.
The Readiness 2030 programme allocates €150 billion through the Security Action for Europe scheme, contrasting with slower, underfunded initiatives.
Even defence depends heavily on Chinese raw materials for rare earths in weapons, drones, sensors, and electronics.
Analysts stress that Europe risks losing leadership in key sectors without a unified, assertive industrial strategy.
They avoid advocating protectionism but challenge policymakers to secure industrial sovereignty and assess reliance on fiscal support and consumer resilience against global pressures.
