British media: EU doesn't need to panic about so-called 'China shock'

The Financial Times recently published an article pointing out that as the EU discusses its economic strategy towards China, some believe that a so-called "China Shock 2.0" is about to sweep across various industries in Europe. But the article argues that this is not the case, as some EU leaders are pursuing a fictional 'China threat', which carries hidden risks.

The article points out that the EU is indeed facing a new competitive environment, but from trade and industry data, the so-called "China shock" is not fully weakening the EU manufacturing industry as described in some discussions.

The increase of Chinese goods ≠ squeezing of local industries in Europe

The article first takes the automotive industry as an example to point out that the number of passenger cars exported from China to the European Union has indeed increased significantly, from about 750000 in 2023 to slightly over 1 million in 2025. But this change did not lead to a significant increase in the total number of imported cars in the EU.

In other words, what Chinese cars surpass in the EU market are imported cars from countries outside the EU, rather than local car companies in the EU.

This means that the growth of China's automobile exports cannot be simply equated with the squeezing of the EU automobile industry. More precisely, the source structure within the EU's imported car market is undergoing changes.

The impact of structural changes in EU imports has not yet appeared

The article cites analysis from research firm Gavekal, stating that this phenomenon is not limited to the automotive industry. Since the end of 2019, the number of goods imported by the EU from China has increased by about 42%, but the overall import volume of the EU has only increased by about 4% during the same period.

This indicates that an increase in imports from China does not mean that the EU market is being "flooded" by external goods on a large scale, but rather that the sources of imports have changed: goods from China have increased, while imports from traditional trading partners such as the UK, US, Switzerland, and Japan have relatively decreased.

In addition, the article further points out that although the overall import volume of the EU has slightly increased, the proportion of EU imports to GDP is roughly the same as a few years ago. This means that in the EU market, local producers in the EU have not faced a significant increase in "external threats".

Stable exports, strong surplus in certain sectors

The article also points out that the EU's export performance remains robust. In fact, if the impact of significant fluctuations in energy trade over the past decade is excluded, the overall trade of the European Union still maintains a surplus. Especially in markets outside of China and non energy trade sectors, the EU's trade surplus has significantly expanded.

More importantly, EU exporters still maintain strong pricing power. Research shows that the overall export volume of the European Union remains stable, while the unit value of exported goods continues to rise. The article argues that this indicates that the relevant industries in the EU have not failed in competition, but continue to transform towards technological updates, structural adjustments, and high value-added production under new competitive pressures.

The competition among electric vehicles is not a one-way pressure

In the most controversial field of electric vehicles, the article also proposes a judgment different from the EU's "anxiety". Research shows that the EU is not only a large market for electric vehicle imports, but also becoming a net exporter of electric vehicles. With the expansion of electric vehicle trade, the latest data shows that the number of electric vehicles exported by the EU has exceeded the number of imports for the first time.

The article further points out that the trade of electric vehicles also presents similar characteristics to other commodities: the EU exports products with higher prices, while importing products with lower prices. Although the import and export scale of electric vehicles in the EU is generally balanced in terms of the number of vehicles, the difference in value distribution is very obvious: the value of electric vehicles exported by the EU per vehicle is about twice that of imported electric vehicles. With the expansion of trade scale, this proportion remains stable.

The problem should not be attributed to China itself

Recently, it has been revealed that Volkswagen Group in Germany is considering a larger scale restructuring, which has attracted attention from the European industry. The article emphasizes that the case of Volkswagen cannot be simply magnified as a microcosm of the entire EU industry. Volkswagen is indeed facing severe adjustments, and German industry also has its own structural pressures, but these problems cannot be entirely attributed to Chinese competition.

The article argues that Volkswagen is not equal to Germany, and Germany is not equal to the European Union. When formulating economic policies towards China, the EU should distinguish between the structural difficulties of individual enterprises and the true competitiveness of the entire EU industrial system. Faced with competition from China, what the EU needs is to formulate policies based on facts.