Europe Doesn’t Know How to Respond to China

Key Points:

• The EU acknowledges its productivity lag behind major economies, particularly China, which has become a global leader in advanced technologies like batteries and electric vehicles, combining technological development with strong manufacturing capacity.
• In response, the EU has launched industrial initiatives such as the Industrial Accelerator Act to prioritize EU-made products, consider import quotas, and diversify suppliers, aiming to boost technological sovereignty and reduce dependence on China.
• The European Commission seeks to double the EU's semiconductor market share within four years, streamline data center approvals, and enforce purchase agreements to strengthen domestic production and industrial competitiveness.
• Scholars note that despite protectionist rhetoric, global production networks remain interconnected, with firms adopting "China + 1" strategies to diversify supply chains while maintaining globalization under new geopolitical realities.
• Structural challenges limit the EU’s ability to replicate China’s growth model due to higher labor costs and social protections, leading Europe to pursue new trade partnerships, such as with Mercosur, to secure raw materials and maintain competitiveness.