China’s growing exports threaten Europe’s economy, and Goldman Sachs predicts GDP losses in Germany, Italy, France, and Spain.
Beijing’s export-led recovery intensifies global competition, leaving European economies exposed to mounting market pressures.
Goldman Sachs lowered its growth forecasts for Europe, warning that stronger Chinese trade will shrink euro-area GDP by 0.5% by 2029.
Germany faces the largest decline, with GDP expected 0.9% lower over four years, while Italy loses 0.6%, and France and Spain 0.4%.
Giovanni Pierdomenico notes that China’s increased goods supply worsens Europe’s trade deficit and weakens its international competitiveness.
Eurozone exporters lost up to four percentage points of market share to China in major global markets over the past five years.
For each extra dollar of Chinese exports, European exports drop between twenty and thirty cents, steadily eroding competitiveness.
Europe Struggles to Respond
The EU launched programs like the Critical Raw Materials Act and the AI Continent Action Plan, but Goldman Sachs doubts their effectiveness.
Filippo Taddei says Europe struggles to counter China because of its dependence on Chinese raw materials.
Analysts warn that targeting Chinese products faces limits, as Europe still relies on critical inputs from Beijing.
Funding for resilience programs remains insufficient, weakening Europe’s ability to restore export competitiveness.
Experts caution that weak EU responses risk further industrial decline, while aggressive measures could disrupt critical supply chains.
Industrial Sovereignty Remains Elusive
Goldman Sachs notes Europe only invests significant resources in defence through the Readiness 2030 plan, backed by €150 billion in loans.
Europe still relies heavily on Chinese rare earths and other materials for weapons, drones, sensors, and electronics.
Analysts stress that without a unified, assertive industrial strategy, Europe risks losing leadership in key sectors.
Goldman Sachs stops short of recommending protectionism but challenges policymakers: Can Europe achieve industrial sovereignty? How long can fiscal support protect it from global pressures?
