China Shock 2.0 Sparks European Concerns Over High-End Exports

At the recent G7 summit in France, concerns over what economists term 'China Shock 2.0' took center stage. French President Emmanuel Macron warned that Chinese exports are 'literally killing' segments of European industry, reflecting a growing unease across the continent about China's expanding industrial prowess.

Unlike the original China Shock after Beijing joined the WTO in 2001—which flooded Western markets with cheap textiles, furniture, and electronics—the new wave targets higher-value sectors. Chinese companies are now challenging European firms in electric vehicles, batteries, industrial machinery, robotics, and clean technology.

The shift is backed by data: China's share of global goods exports has surged from around 4% in 2000 to roughly 16% today, making it the world's largest exporter. Last year, China recorded a record trade surplus of $1.2 trillion, further fueling European anxieties.

Policymakers across Europe are increasingly alarmed, drawing parallels to the US experience a decade ago when millions of manufacturing jobs were lost. The original China Shock is estimated to have cost the US millions of jobs, particularly in textiles and consumer electronics.

Now, European governments fear a similar disruption in advanced industries that are key to their economic future. The G7 discussions signal that trade tensions with China are likely to remain a top priority for European leaders.