China’s rapid expansion into higher-value industrial and technology sectors is increasing competitive pressure on European manufacturers, with Germany among the countries most exposed, the European Central Bank said on Tuesday.
The ECB said China’s growing presence in international markets is challenging European exporters, particularly in machinery and transport equipment, where European companies have traditionally maintained strong positions.
According to an article published in the ECB’s Economic Bulletin, the European Union’s share of global goods exports has declined in sectors and markets where Chinese manufacturers have significantly expanded their presence.
Among the EU’s major economies, Germany has the highest degree of export overlap with China, while Italy has the lowest, the ECB analysis found. Smaller economies such as Ireland and Greece have relatively limited exposure to Chinese competition.
The ECB said the growing rivalry is particularly significant for industries that have supported economic growth across several European countries for decades, including automotive manufacturing and industrial machinery.
China’s expanding industrial capacity is also affecting European exports to its market, as domestic production increasingly replaces goods previously sourced from European suppliers.
The decline in European exports to China has been particularly visible in economies closely linked to the continent’s manufacturing and automotive supply chains, including Germany and several Central European countries, the ECB said.
Goodness Anunobi
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