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

Key points

• Europe is facing a fresh China shock that threatens to cannibalise local factories, leading to job losses and de facto colonisation of industry by Beijing, trade analysts and representatives have said.
• They fear the plunging exchange rate and support for Chinese “zombie firms” has echoes of the crisis in the US 25 years ago when the term “China shock” was coined.
• It referred to the impact of China bursting on to the global trade stage after becoming a member of the World Trade Organization, with soaring imports displacing local industries and causing the loss of up to 2.5m jobs.
• Jens Eskelund, the president of the European Chamber of Commerce in Beijing and a seasoned China watcher, said: “When people think of China imports, they think of finished goods like EVs [electric vehicles] but that is not where the problem is.
• It is the sheer volume of components being imported from...