Brussels, Belgium – A new report from the French government’s strategic planning agency is raising alarms about the growing economic challenge posed by China to European industries, warning of a “systemic threat” and urging a renewed focus on competitiveness. The report, published on , highlights concerns across multiple sectors, from aerospace to nuclear energy, where Chinese companies are rapidly closing the technological gap and leveraging cost advantages.
The assessment comes two years after a similar report led by former European Central Bank President Mario Draghi, and signals a growing sense of urgency within European capitals regarding Beijing’s economic ambitions. According to the report, European companies are increasingly facing competition from Chinese firms capable of delivering comparable quality at significantly lower prices and faster production speeds. One unnamed European aerospace executive reportedly warned that China’s progress in the sector mirrors its ascent in the automotive industry, suggesting a pattern of rapid technological catch-up.
The concerns extend beyond manufacturing. Officials in the nuclear energy sector are reportedly alarmed by the ability of Chinese companies to construct facilities up to four times faster and at costs up to four times lower than their European counterparts, while maintaining comparable safety and quality standards. This competitive pressure is prompting a re-evaluation of industrial strategies and a call for increased investment in research and development, as well as measures to protect strategic industries.
Clément Beaune, France’s Minister for Strategic Planning, emphasized the need for a renewed focus on the Chinese challenge, stating, “In Europe, we have been focused lately on the United States and we talk much less about China. But the Chinese threat is there, it should not be trivialized and calls for a new awareness.” Beaune’s comments underscore a growing sentiment that Europe has underestimated the scale and speed of China’s economic advancement.
The report’s publication coincides with broader discussions within the European Union about its strategic relationship with China. Following the 2024 European Parliament elections, EU-China relations have been subject to increased scrutiny, with debates centering on issues such as trade imbalances, intellectual property rights, and human rights. The evolving geopolitical landscape, including the ongoing war in Ukraine and rising tensions in the Indo-Pacific region, further complicates the EU’s approach to China.
Germany, traditionally a strong advocate for engagement with China, has also begun to reassess its policy. A shift away from the “win-win” approach of previous years towards a more strategic competition is evident, reflecting growing concerns about economic dependencies and potential vulnerabilities. This recalibration is likely to influence the broader EU strategy towards China.
The report also highlights the rapid development of China’s artificial intelligence (AI) capabilities and its integration across various sectors – a development described as a “wake-up call” for Europe. China’s “AI+” strategy aims to leverage AI to enhance productivity, innovation, and competitiveness, potentially giving Chinese companies a significant advantage in key industries. European policymakers are now grappling with how to respond to this challenge, including investments in AI research and development, and the establishment of regulatory frameworks to ensure fair competition.
However, defining a unified European approach to China remains a complex undertaking. As Sebastian Contin Trillo-Figueroa notes, there is a lack of clarity regarding what Europe actually *wants* from China. Divergent national interests and priorities within the EU often hinder the development of a cohesive strategy. Some member states prioritize economic ties with China, while others emphasize security concerns and the need to protect strategic industries.
The report’s findings are likely to fuel further debate within the EU about the appropriate balance between economic engagement and strategic autonomy. The challenge for European policymakers will be to navigate this complex relationship in a way that safeguards European interests, promotes fair competition, and addresses the systemic risks posed by China’s growing economic power. The need for a coordinated and comprehensive strategy is becoming increasingly apparent, as the “rouleau compresseur” – or “steamroller” – of Chinese economic influence continues to gain momentum.
The implications of this evolving dynamic extend beyond Europe. The United States, which has been increasingly vocal about its own concerns regarding China’s economic practices, is likely to welcome the renewed focus on the Chinese challenge within the EU. A more unified transatlantic approach to China could potentially exert greater pressure on Beijing to address issues such as trade imbalances, intellectual property theft, and human rights abuses.
The report serves as a stark reminder that the global economic landscape is undergoing a fundamental shift. The rise of China as a major economic power is reshaping the international order, and Europe must adapt to this new reality if We see to maintain its competitiveness and influence in the 21st century.
