World
The Looming “Chinese Rollercoaster”: Europe’s Industrial Base Under Threat
Europe’s industrial heartland is facing an unprecedented challenge. A recent report from the Haut-Commissariat à la Stratégie et au Plan (HSP) reveals the escalating impact of Chinese competition, extending far beyond initial concerns. The report, released on February 9, 2026, highlights a “systemic threat” to the European economy, with the scale and speed of China’s industrial ascent exceeding previous expectations.
A Second Wave of Competition
According to Clément Beaune, the head of the HSP, Europe is experiencing a “second wave” of competition from China, amplified since the COVID-19 pandemic. This isn’t simply about low-cost goods; China is rapidly gaining ground in key strategic sectors traditionally dominated by European manufacturers.
14 Million Jobs at Risk
The report identifies approximately 14 million jobs across Europe potentially at risk. Sectors like automotive, machine tools, batteries, and chemicals are particularly vulnerable. The automotive industry, employing nearly 14 million Europeans, is already feeling the pressure. China has surpassed Germany in automobile production in under five years, now accounting for 40% of global car production.
The Rise of Chinese Automotive Exports
In August 2025, China exported nearly 8 million vehicles, compared to just over 3 million from Germany. France’s automotive exports are heavily reliant on markets facing strong Chinese competition, including Germany, Belgium, the UK, and Spain. Similar trends are emerging in other sectors.
Machine Tools: A Cornerstone Under Pressure
The machine tool industry, a cornerstone of German manufacturing, is also facing significant disruption. China overtook Germany in machine tool exports in the mid-2010s. By 2023, China exported approximately €30 billion worth of machine tools, compared to €20 billion for Germany and a mere €2 billion for France. The scope of Chinese competition has expanded dramatically, from around 10% of markets in 2000 to nearly 80% in 2023.
Battery Technology: A Rapid Ascent
The growth in battery technology is even more striking. Chinese battery exports have surged from around €10 billion in the 2010s to over €80 billion today, while Germany’s exports remain at approximately €10 billion.
Which Countries Are Most Exposed?
Germany is the most exposed country, with approximately 70% of its manufacturing production facing Chinese competition. Italy follows closely with around 60%, while France is affected to a lesser extent, at 36%. Though, when focusing on sectors where Europe historically held a competitive advantage, the exposure is even greater: 100% of German production in these areas is now challenged by Chinese rivals, compared to 30% in 2000. For France, this figure has risen to 70%, from zero in 2000, and Italy faces competition on 92% of its production.
Quality Improvements and Cost Advantages
The increasing competitiveness of Chinese products is driven by two key factors: improvements in quality and significantly lower production costs. The cost differential averages between 30% and 40%. This combination presents a formidable challenge for European manufacturers.
What Can Europe Do?
The HSP report underscores the urgency of addressing this challenge. Delaying action will only increase the cost of intervention. The report suggests a necessitate for a comprehensive reassessment of European industrial strategy and a proactive approach to mitigating the risks posed by China’s industrial expansion.
Did you know?
The Haut-Commissariat à la Stratégie et au Plan is a public body attached to the French Prime Minister’s office, responsible for providing analysis and recommendations on public policy.
FAQ
Q: What sectors are most affected by Chinese competition?
A: Automotive, machine tools, batteries, chemicals, and plastics are among the most affected sectors.
Q: How significant is the cost advantage for Chinese manufacturers?
A: The cost advantage ranges from 30% to 40% on average.
Q: Which country is most exposed to Chinese competition?
A: Germany is the most exposed, with approximately 70% of its manufacturing production facing competition.
Q: What is the Haut-Commissariat à la Stratégie et au Plan?
A: It is a French public body that contributes to public policy through analysis and proposals.
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