Global trade tensions: China's industrial capacity vs Western regulatory structures

The global economic landscape is being reshaped by a fundamental tension between China's engineering-driven industrial model and the regulatory frameworks of Western nations. In his book ‘A rotta di collo’, Dan Wang analyzes how China has become an ‘engineering state’ responsible for approximately one-third of global manufacturing, contrasting this with the United States, where legal and bureaucratic structures may hinder productive capacity.

This shift has significant implications for the European Union, which faces what economists call ‘China Shock 2.0’. The EU is struggling with massive trade deficits, with daily losses exceeding one billion euros. The impact is visible in the automotive sector; for instance, Volvo reported a 23% revenue decline and significant losses due to falling sales in China and tariffs in the United States, leading to global job cuts.

Experts suggest that failing to manage external economic relations allows foreign distributive choices to threaten Europe's own productive structures, forcing a choice between industrial decline or painful economic adjustments.