China’s export surge challenges Europe’s economy, and Goldman Sachs predicts GDP declines in Germany, Italy, France, and Spain.
Beijing expands its export-led recovery, intensifying global trade competition.
Goldman Sachs lowers European growth forecasts in response to rising Chinese exports.
Economist Giovanni Pierdomenico says increased Chinese goods supply will widen Europe’s trade deficit and weaken its international competitiveness.
He adds that stronger Chinese competition could reduce euro-area GDP by 0.5% by 2029.
Germany faces the largest drag, with GDP likely falling 0.9% over four years.
Italy may lose 0.6%, while France and Spain could see declines near 0.4%.
Eurozone exporters lost up to four market-share points to Chinese rivals in major markets over five years.
For every dollar China adds in exports, Europe typically loses twenty to thirty cents.
This substitution steadily erodes Europe’s industrial advantage.
Europe Faces Limited Countermeasures
The EU launches programs like the Critical Raw Materials Act and AI Continent Action Plan, yet Goldman Sachs doubts their effectiveness.
Analyst Filippo Taddei notes Europe’s vulnerabilities constrain its ability to respond.
Goldman stresses that Europe depends heavily on China for essential raw materials.
Targeted actions may succeed, but broad restrictions could clash with supply dependencies.
The bank warns funding for industrial initiatives remains insufficient to restore competitiveness.
Experts argue timid policies risk accelerating industrial decline, while aggressive tariffs could disrupt supply chains.
Industrial Resilience Remains Incomplete
Goldman highlights defence as the only sector receiving substantial European investment.
The bloc funds Readiness 2030 with €150 billion in loans through the Security Action for Europe scheme.
Even defence remains reliant on Chinese rare earths for weapons, drones, sensors, and electronics.
Analysts caution Europe risks losing ground in key sectors without a unified industrial strategy.
Goldman stops short of advocating protectionism but challenges policymakers: can Europe secure industrial sovereignty and sustain itself amid mounting global pressures?
