HomeFinance NewsFinanceEU-China Trade Disaster Imminent: Brace for Economic Carnage!

EU-China Trade Disaster Imminent: Brace for Economic Carnage!


EU-China trade relations are in a ‘slow-motion train accident,’ business group says


Trade tensions between Europe and China are expected to intensify due to China’s rapidly growing manufacturing capabilities at lower costs.

Jens Eskelund, president of the European Union Chamber of Commerce in China, warns that Europe’s strategic industries, such as chemicals, metals, and electric vehicles, face increasing pressure from China’s overcapacity in manufacturing.

Eskelund highlights the concerns this poses for Europe’s industrial base and security, as low-cost production in China could lead to a decline in European manufacturing.

China’s focus on high-end manufacturing aims to boost technological self-sufficiency and reduce reliance on real estate for economic growth.

However, this has resulted in a significant excess of production capacity across various industries.

Eskelund emphasizes the need for open communication between Europe and China to address this issue, ensuring that trade flows continue uninterrupted.

He warns that Europe may not stand idly by and witness the erosion of its manufacturing sector due to China’s overcapacity.

Manufacturing plays a crucial role in the European economy, accounting for almost one-fifth of employment and contributing a substantial share to the bloc’s business economy value added.

Despite Europe’s recent policy stance, the ongoing tensions between the US and China, as well as Beijing’s response, have increased challenges for European businesses operating in China.

China has recently emphasized security concerns in its five-year planning document, and mentions of security have increased significantly.

European companies report a decline in market share in China due to intense competition from local manufacturers.

They also face challenges in sourcing from China while being unable to sell to the Chinese market due to depressed pricing mechanisms in Europe.

China’s dominance in global trade is reflected in the increasing number of container ships sending Chinese goods to Europe.

Meanwhile, China’s imports are underperforming, raising concerns about the overall health of the Sino-European trade relationship.

  • Overall sentiment: negative
  • Positive


    “Trade tensions between Europe and Beijing will likely escalate due to China’s growing ability to manufacture more cheaply in strategic industries, according to Jens Eskelund, president of the European Union Chamber of Commerce in China.”

    “Europe cannot just accept that strategically viable industries constituting the European industrial base are being priced out of the market.”

    ““China has us in a geopolitical trap. We remain dependent on sourcing from China but we cannot sell to the market,” the unnamed executive said in the report.”

    ““A key challenge is that pricing mechanisms in Europe are so depressed that if we were to drop our Chinese partners today, we would not be able to sell at European auctions, due to us not being able to compete with the prices of Chinese players””

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