The European Central Bank has warned that China’s industrial transformation is eroding Europe’s share of global goods exports, particularly in machinery and transport equipment.
China’s industrial transformation is squeezing European firms out of global markets, particularly in machinery and transport equipment, with German companies taking some of the biggest hits, the European Central Bank said. In an Economic Bulletin article, the ECB said the European Union’s share in global goods exports had declined, particularly in sectors and destinations where China had strengthened its global presence, notably machinery and transport equipment. Among the EU’s biggest nations, Germany has the greatest export similarity with China while Italy has the smallest, the ECB found, though smaller countries including Ireland and Greece were among the least exposed.
The ECB said the findings pointed to intensifying competition in sectors that had been key drivers of growth in some European economies over past decades, including automotive production and industrial machinery. Beyond crowding out European firms from third-country markets, China is also importing fewer products from Europe as its domestic production expands, with the ECB noting the fall was most pronounced in economies integrated into European manufacturing and automotive value chains, including Germany and several central European economies.
Source: Reuters
