Which countries are most vulnerable to the industrial rise of China? Mapping Europe’s uneven exposure

This box discusses the heterogeneous impact on EU countries of China’s rapid industrial transformation, which is reshaping global trade patterns. The similarity between the export structures of China and several EU countries has increased substantially since 2019, particularly in machinery and transport equipment, and is most pronounced in manufacturing-intensive economies, such as Germany. At the same time, China’s goods imports have become less aligned with EU export structures, illustrating China’s decreased reliance on European industrial goods. These developments have coincided with losses in EU export market shares in sectors and destinations where Chinese competition has intensified, although EU exports have remained more resilient in higher-value-added sectors, especially in the US market. These findings illustrate that there are differences across EU countries and sectors in terms of their exposure to China’s industrial rise, reflecting differences in specialisation and integration into global value chains, with implications for policy priorities at the EU and national levels. JEL Classification: F14, F13, F15, F60