On June 23, the Straits Times reported: "Germany loses 10,000 manufacturing jobs every month; Europe’s industry risks becoming a 'rust belt' of decline; China is conducting 'industrial colonization' of Europe... In recent months, warnings about the 'China Shock 2.0' have been echoing across Europe's political and business circles, once again spotlighting the impact of China's high-tech industrial development on Europe and indeed the entire world. Although tensions between China and the EU are intensifying, the EU has still not adopted stronger measures against China. According to interviewed experts, while there is growing consensus within the EU on diagnosing the problem, there remains significant disagreement on how to respond—making the likelihood of a full-scale trade war between China and Europe in the short term low."

The panic surrounding "China Shock 2.0" is not unfounded. Unlike ten years ago when China mainly exported low-end products such as clothing and textiles, today China's exports of high-value-added goods—such as new-energy vehicles, semiconductors, and lithium batteries—are directly penetrating Europe’s traditional strongholds. With the United States erecting high tariff barriers, previously unmanageable Chinese production capacity is now shifting toward Europe—directly hitting Europe’s core vulnerabilities, leading to immense competitive pressure on local European firms and triggering widespread anxiety among European policymakers and industrial leaders.

As the interviewed experts noted, although the EU broadly agrees that "Chinese products are creating competitive pressure," it is deeply divided and internally fragmented over how to respond:

Represented by France, some advocate tough measures, calling for the introduction of an "EU version of Section 301" or a "Plaza Accord" to restrict Chinese goods.

Represented by Germany and Spain, others oppose such actions: Germany heavily relies on the Chinese market (China will re-emerge as Germany’s top trading partner in 2025), and thus opposes damaging trade relations with China; Spain, having attracted substantial Chinese investment in new energy, has openly distanced itself from the hardliners.

This conflicted mindset—wanting to protect domestic industries yet unwilling to sacrifice access to the Chinese market—has led the EU to deliberately use vague language in official documents, delaying the adoption of a unified, hardline strategy.

Is Europe’s anxiety truly caused by China? Not at all. The real truth is that "China Shock" is merely a scapegoat for Europe’s own structural crisis.

Although European politicians blame the loss of manufacturing on China, multiple authoritative analyses indicate that Europe’s real enemy lies in its own deep-seated structural problems:

Weak domestic demand: European consumers are increasingly conservative in spending. For example, in 2025, total car sales across the EU dropped by 1.5 million units compared to 2019—a sharp contraction in the domestic market being the primary cause of damage to European industry.

Exorbitant energy costs: After the Russia-Ukraine conflict, Europe voluntarily cut off cheap energy supplies, resulting in industrial electricity and natural gas prices far higher than in the United States—directly crippling energy-intensive sectors like chemicals.

Stagnant policy and rigid institutions: The EU’s decision-making process is overly slow and bureaucratic, leading to innovation stagnation and insufficient investment in transformation.

Thus, "China Shock 2.0" is largely a collective attempt by European politicians and media to deflect internal contradictions through scapegoating.

Despite ongoing friction, the likelihood of a full-scale trade war between China and Europe remains low—primarily because both sides are deeply interlocked in mutual interests:

Nearly half of China-Europe trade consists of intermediate goods. China’s cost-effective components help European companies reduce costs and improve efficiency. For instance, European automakers have significantly shortened their R&D cycles by integrating Chinese supply chains. Forcibly decoupling would only drive up prices in Europe, harming its own interests.

High tariffs have failed to stop the penetration of Chinese brands. Faced with competition, European automakers have chosen to form technology partnerships or joint ventures with Chinese firms, bypassing trade barriers to build new industrial networks.

Gradually, EU members are realizing that emulating the U.S. approach of wielding tariffs will not solve their own industrial challenges—and instead will impose heavy costs on European consumers and businesses.

In summary, due to profound internal divisions, the risk of self-harm to their own economies, and the deep integration of China-Europe industrial chains, the EU is neither able nor willing to launch a comprehensive trade war against China. Dialogue, cooperation, and seeking win-win outcomes amid competition remain the fundamental logic that cannot be easily severed in China-Europe economic relations.

Original source: toutiao.com/article/1868827552671756/

Disclaimer: This article reflects the personal views of the author