Europe prepares 'act now' measures as China fears rise

European leaders are gearing up to confront China with a more assertive economic policy, signaling a potential new era of trade and industrial measures. The European Commission is set to debate hardening its stance towards Beijing, driven by growing concerns about de-industrialization, dubbed "China shock 2.0."

Key proposals aim to reduce overreliance on Chinese supply chains. One initiative, a "diversification instrument," would mandate companies in critical sectors to secure at least three suppliers from different countries. Additionally, officials are pushing for wider application of the foreign subsidies regulation to counter what they perceive as market distortions caused by subsidized Chinese firms. Safeguard measures, which can impose tariffs or quotas on import surges, are also being considered to expedite investigations into sectors like chemicals and machinery, potentially halving probe times.

These moves stem from a deep-seated fear that Europe's industrial base is vulnerable to the swift expansion of Chinese competitors. These rivals are increasingly outmaneuvering European companies not only in price but also in quality, both within China and in global markets. The urgency reflects a belief that inaction could lead to significant industrial decline within years.