China’s export push intensifies competition and threatens Europe’s economy, as Goldman Sachs warns of GDP hits across Germany, Italy, France, and Spain.
European economies now shoulder rising competitive strain as Beijing renews its export-driven recovery.
Goldman Sachs reports highlight these risks and cut European growth forecasts in response to China’s escalating export surge.
Giovanni Pierdomenico states that increased Chinese supply widens Europe’s trade deficit and further weakens its competitive position.
He expects stronger Chinese export pressure to reduce euro-area GDP by about 0.5% by late 2029.
The bank predicts Germany will take the hardest blow, with real GDP falling by roughly 0.9% over four years.
It also projects a 0.6% drop for Italy and about 0.4% declines for France and Spain.
Goldman Sachs stresses that global markets now show rapid substitution between European and Chinese goods.
It estimates that eurozone exporters lost up to four market-share points to China in major markets over five years.
For every dollar China adds to exports, Europe typically loses twenty to thirty cents.
This substitution trend steadily erodes Europe’s competitive strength.
Limited Room for Effective Countermeasures
The European Union launches programmes to boost resilience, including the Critical Raw Materials Act and the AI Continent Action Plan.
Goldman Sachs questions their impact and says Europe struggles under structural weaknesses.
Filippo Taddei argues that Europe’s vulnerabilities restrict its ability to mount decisive responses.
The bank notes that Europe depends heavily on Chinese inputs for essential production stages.
Analysts caution that broader attempts to limit Chinese supply may clash with Europe’s own material reliance.
They add that Europe still depends on foreign suppliers despite recent initiatives.
They also warn that funding falls short of stated ambitions, casting doubt on Europe’s ability to regain competitiveness.
Experts claim that weak action from Brussels could hasten Europe’s industrial decline as Chinese firms expand globally.
They also warn that harsh measures such as sweeping tariffs could disrupt crucial supply chains.
A Challenge to Europe’s Strategic Direction
Goldman Sachs says defence stands as the only policy area receiving substantial European funding.
The bloc’s Readiness 2030 programme, supported by €150 billion in loans, highlights this contrast.
Even with this push, Europe still relies on Chinese raw materials for advanced defence technologies.
Rare earth elements from China remain vital to weapons systems, drones, sensors, and high-tech electronics.
Goldman’s analysts stress that Europe risks losing ground without a unified and assertive industrial plan.
They avoid calling for protectionism but highlight urgent issues for policymakers.
They ask whether Europe can secure the industrial sovereignty it seeks.
They also question how long fiscal support and consumer strength can shield Europe from mounting global pressures.
