RaboResearch says China\u2019s growth remains anchored in a production-led model that has been weakened by the property downturn, a debt overhang and soft domestic demand. With US market access narrowing, the research argues Europe becomes the natural outlet for Chinese manufacturing exports. It adds that while lower-priced, higher-end imports can help European buyers, they can also displace local output, compress margins and deter capital investment; ECB research is cited as suggesting these adverse effects may dominate, even before factoring in longer-term scarring and strategic vulnerabilities.<\/p>\n\n
The note says Beijing is unlikely to curb capacity, subsidies or exports quickly because manufacturing underpins growth, employment, technological upgrading and autonomy, and a rapid shift would bring immediate costs.<\/p>\n\n
China is also portrayed as holding leverage through critical materials and supply chains, enabling selective retaliation, which leaves Europe exposed to export pressure as economic-security frictions rise. RaboResearch adds that China has an advantage in a sudden escalation, whereas Europe\u2019s hand improves over time if the EU stays united and reduces dependencies; it warns that a rising number of EU-sceptical leaderships could dilute EU powers, obstruct co-operation and weaken soft power, creating openings for external actors.<\/p>\n\n\n\n