EU Manufacturers May Stop Competing With China by 2030, Warns Official

European manufacturers could abandon efforts to compete directly with Chinese rivals by the end of the decade if current economic trends continue. Jens Eskelund, head of the European Union Chamber of Commerce in China, warned that European firms operating in the region might shift from a "Made in China for China" approach to a philosophy focused on global supply chains, mirroring broader shifts involving China. Speaking in Brussels, Eskelund noted that European companies face an existential crossroads driven by a record trade deficit and a growing protectionist mood across major European capitals.

A report by Goldman Sachs projected that increasing Chinese exports could reduce the EU's gross domestic product by 0.5% by 2030, while cutting Germany's GDP by up to 0.9%. Eskelund questioned the long-term viability of trade that delivers negative value for one party, pointing to potential doomsday scenarios that include widespread job losses, collapsed tax bases, and spiraling social benefit costs across Europe. This pressure is already impacting European automotive, chemical, and renewable energy sectors, with German automakers facing simultaneous profit drops in China and intense domestic competition from companies like BYD, Geely, and SAIC Motor.

European manufacturers may stop competing with China by the end of the decade to avoid mass job losses.

Eskelund dismissed the term "China shock 2.0," arguing that the current import trends should not come as a surprise because they align directly with Beijing's stated five-year plans and long-term focus on self-reliance. He noted that China has spent decades systematically reducing its own import dependencies across advanced sectors such as artificial intelligence, robotics, green technology, and quantum computing. Meanwhile, a recent report from the Centre for European Reform urged Germany to adjust its strategy as Beijing doubles down on domestic supply chain dominance and industrial self-sufficiency.

To navigate these mounting pressures, Eskelund advised European industries to brace for intense competition and urged EU leaders to engage directly with Beijing to establish mutually beneficial trade values. He emphasized that while Europe traditionally focuses heavily on abstract principles, China remains intensely focused on tangible economic outcomes. Addressing the ongoing trade imbalances by merely increasing European exports remains unrealistic, particularly as fierce competition and an undervalued currency continue to test European industrial resilience.

Why it matters This widening industrial divergence between Europe and China threatens foundational manufacturing sectors, risking long-term economic stability and employment across Western nations. Understanding these shifting supply chain dynamics highlights the broader global challenges domestic industries face in adapting to rapidly scaling Asian markets.