Chinese industrial competition threatens European manufacturing

A new report from the Economic Council of Industry (IER) warns that rapid technological advancement in China has fundamentally altered competitive conditions for Swedish and European industries. China currently accounts for approximately 30 percent of the world's total manufacturing value-added, surpassing the combined totals of the United States, Germany, and Japan.

The report indicates that Chinese competition is driven by more than just state subsidies or low production costs; it is bolstered by the ability to integrate foreign technology, close ties to political systems, and a focus on market share over short-term profitability. This creates a risk of a long-term structural crisis in European industry.

In the automotive sector, the competition is intensifying through both imports and local production. While European manufacturers are attempting to respond with small electric vehicles and new designs, Chinese brands like Leapmotor are challenging established models with advanced software and rapid charging capabilities. Some Chinese firms are also mitigating trade tensions by establishing manufacturing bases within Europe, such as in Spain.