EU Warns Chinese Manufacturing Threat to European Industry

A study by France’s Haut-commissariat à la Stratégie et au Plan finds that up to 55 % of the EU’s manufacturing output could be exposed to Chinese competition in the medium term, with Italy at 60 % and Germany at 70 %. At the European Council on 18‑19 June, leaders urged the Commission to strengthen existing trade‑defence tools and consider new measures to curb reliance on Chinese imports, echoing Commission President Ursula von der Leyen’s call for “de‑risking” rather than full decoupling.

Chinese carmakers are expanding beyond vehicle sales, establishing production facilities in Spain, Hungary and possibly Italy, with firms such as Chery, Leapmotor, Geely, BYD and MG planning or operating plants. The European Commission’s Industrial Accelerator Act proposes stricter rules for foreign investment in sensitive sectors, mandating joint‑venture arrangements, a minimum share of local hiring and a local content threshold for electric‑vehicle components.

EU officials argue that tighter controls are needed to protect strategic supply chains and prevent China from using economic leverage, while industry analysts warn that the influx of Chinese factories could both create jobs and intensify competition for European suppliers.