China’s export surge threatens Europe, and Goldman Sachs predicts GDP losses in Germany, Italy, France, and Spain.
Beijing intensifies its push for export-led growth, forcing European economies to absorb rising global trade competition.
Giovanni Pierdomenico warns that increased Chinese goods supply widens Europe’s trade deficit and erodes its international competitiveness.
Goldman Sachs expects Chinese competition to reduce eurozone GDP by 0.5% by 2029.
Germany faces the largest hit, with GDP projected 0.9% lower over four years; Italy falls 0.6%, France and Spain 0.4% each.
Europe loses market share to Chinese exporters, with eurozone exports dropping up to four percentage points in five years.
For every extra dollar in Chinese exports, European exports typically decline twenty to thirty cents, weakening Europe’s competitive edge.
EU Faces Limited Options Against China
The EU launched measures such as the Critical Raw Materials Act and AI Continent Action Plan, but Goldman Sachs doubts their impact.
Filippo Taddei notes Europe struggles to counter China due to dependence on Chinese raw materials.
Analysts warn broad restrictions risk disrupting supply chains on which Europe heavily relies.
Goldman Sachs highlights structural reliance on foreign suppliers and insufficient funding to restore Europe’s export competitiveness.
Experts say a timid EU response could accelerate industrial decline as Chinese firms expand globally, while aggressive measures could backfire.
Europe’s Industrial Strategy Under Pressure
Goldman Sachs emphasizes that Europe invests substantial funds only in defence through its Readiness 2030 programme, backed by €150 billion in loans.
Despite defence spending, Europe remains dependent on Chinese rare earths for weapons, drones, sensors, and advanced electronics.
Analysts warn Europe risks losing leadership in key sectors without a unified and assertive industrial strategy.
Goldman Sachs urges policymakers to consider whether Europe can achieve industrial sovereignty and how long fiscal support can buffer global trade pressures.
