Topic analysis

Fears of new China shock as EU industry’s reliance on imports grows

Trade analysts and European industry representatives are warning of a new 'China shock' as the EU’s reliance on imported Chinese industrial components grows, driven by an undervalued yuan and state subsidies for Chinese firms. This dependency is causing significant job losses, deindustrialization (particularly in Germany’s machinery and auto sectors), and concerns over economic and security risks, prompting the EU to consider urgent measures like mandatory multi-supplier sourcing for critical components, though long-term legislative solutions won’t take effect until 2027.