VSFaced with climate risk and rising water levels, countries must adapt and build dikes everywhere to avoid submersion. It is now the same in the face of the industrial tsunami that is brewing from China. The first waves of Chinese electric cars in European ports are only the first ripples. With the persistent weakness of the Chinese economy, the country’s production, particularly in energy transition technologies, is surging towards exports.
The automobile manufacturers and suppliers of the Old Continent are learning the consequences and are starting to tighten the bolts. Monday February 19, the equipment manufacturer Forevia announced that it would reduce its global workforce by ten thousand people by 2028 to gain competitiveness in Europe. He is well placed to measure the scale of the wave that is forming, since he actively works for major Chinese manufacturers. He also sees that his own competitors in China are preparing to expand beyond their borders.
For three months, concern has been growing in the West, given the acceleration of investments in the Chinese manufacturing industry and the piling up overcapacity. Solar panel production in China already exceeds the size of the global market estimated by the International Energy Agency. Capital expenditure in the automobile sector increased by 18% in 2023. As consumption is not picking up in the country, all these surpluses are going to export at knockdown prices.
Trade war
Everywhere, in Washington, in Brussels, in Berlin or in Paris, the tocsin is being sounded. THE Financial Times we learn that an American delegation, led by Jay Shambaugh, the undersecretary for international affairs, went to Beijing at the beginning of February to warn the authorities of the risk of retaliation from his country and the Europeans.
But the Chinese Minister of the Economy, He Lifeng, was quick to remind him that it was the American measures taken within the framework of the Inflation Reduction Act, aid to industry, which ignited the powder . As well as the investigation opened by Brussels into Chinese subsidies for electric vehicles. We are now entering the turbulent waters of the trade war.
Europe and the United States, with their obsession with reindustrialization and decoupling, are in the process of measuring their dependence on the Chinese domestic economy. It was its vigorous revival that brought the world out of the financial crisis of 2008-2009. But this time, Beijing does not want to embark on costly construction work or support the consumption of its 1.4 billion inhabitants. Priority to industry. At the expense of ours.