ECB: China's industrial push squeezes German manufacturers
The ECB says China's shift to higher-value production is eroding Europe's export share, with Germany most exposed.
China's push into higher-value and technology-intensive production is putting European exporters under growing pressure, with German manufacturers among the most affected, the European Central Bank said in an Economic Bulletin article.
The EU's share of global goods exports has fallen, especially in sectors and destinations where China has expanded its presence — most notably machinery and transport equipment, the ECB said.
Among the bloc's largest economies, Germany's export profile overlaps most closely with China's, while Italy's overlaps least. Smaller economies such as Ireland and Greece were found to be among the least exposed.
The findings point to mounting competition in industries that have driven growth in several European economies for decades, including automotive production and industrial machinery.
Beyond losing ground in third-country markets, European firms are also facing weaker demand from China itself, as Beijing's domestic production increasingly substitutes for imported goods.
That decline is sharpest in economies deeply integrated into European manufacturing and automotive supply chains, including Germany and several Central European countries, the ECB said.