BEIJING, Sept. 18 (Xinhua) -- For years, similar China-blaming narratives have resurfaced whenever Western manufacturing has shed jobs, with accusations ranging from overcapacity, unfair subsidies to dumping.
The latest smear narratives circulating in Europe reveal real local anxieties over eroding manufacturing competitiveness. But China is not the real cause, and the cure being prescribed will only deepen the stress already being felt.
The reason that those narratives find an audience is not hard to figure out. "Imports raise welfare, but the gains are dispersed while the losses are concentrated," noted Xiao Lisheng, a researcher with the Chinese Academy of Social Sciences.
"The losses of domestic industries facing import competition are concentrated and visible, while the gains to consumers from cheaper, better goods are dispersed and rarely noticed," he explained.
This asymmetry reveals why the "China Shock" narrative persists despite the broader benefits of trade. The way forward is not to blame China, but to work with it -- to cooperate and embrace the opportunities it offers as a buffer for the global economy, Europe included.
The hard truth is that the lack of manufacturing competitiveness in Europe is a self-inflicted wound. Electricity in Europe is far more expensive than it is for its competitors, which is a structural disadvantage that determines whether energy-intensive production like steel, chemicals and aluminium can survive. This is partly the result of European cost structures and the policies that sustain them.
The burden is compounded by the EU's own protection measures. The European Commission's latest steel safeguards, which almost halve import quotas and double out-of-quota tariffs, are intended to protect EU steel producers but risk severely harming the far larger downstream manufacturing sector.
The European Automobile Manufacturers' Association has warned that the steel safeguards would cost downstream manufacturers 5 billion euros (about 5.74 billion U.S. dollars) to 9 billion euros a year, push some steel prices up by as much as 30 percent, and burden smaller firms with unworkable origin rules. Its conclusion is blunt: the measures are "a blow to Europe's industrial competitiveness."
Extending those tariffs to imported downstream products would only deepen the wound. In an August policy analysis, the National Taxpayers Union (NTU) of the United States describes this dynamic as "cascading protection." Once upstream steel tariffs raise costs for steel-using firms like refrigerator makers, shipbuilders and welding companies, policymakers do not remove the upstream tariff but instead extend protection to downstream products, as some industry groups now propose.
However, as noted by the NTU, such tariffs "may protect these firms in the domestic market but do little to help them compete abroad." In essence, the tariffs make European consumers and downstream users pay higher prices, shrink demand and erode the competitiveness of the very industries they claim to protect.
History already reveals what happened when Europe imposed anti-dumping duties on Chinese solar panels in 2013: costs rose for downstream installers, demand fell and SolarWorld, the German manufacturer that lobbied hard for protection, went bankrupt.
Europe is now repeating the same mistake with steel, turning a blind eye to what China has quietly absorbed on its behalf, namely energy shocks, supply-chain disruptions and inflationary pressures.
What Europe is overlooking is the "China Buffer." Reality is that Chinese investment revives idle plants and creates local jobs, Chinese intermediate goods keep European factories competitive, and Chinese clean-energy supply chains drive down the cost of the global green transition.
During Europe's recent heatwave, Chinese air conditioners met a surge in demand that domestic supply could not meet. The same capacity helps European factories secure inputs and keep costs down when global supply chains are strained.
For European manufacturers, Chinese intermediate goods are cost-effective inputs that leave more room for industrial upgrading. European Central Bank research found that, for sectors with growing imports from China, increased exposure to Chinese intermediate goods was associated with a 0.6 percentage point boost in industrial production growth. A 2025 World Bank working paper found similar gains in Ethiopia, where Chinese intermediate goods boosted productivity and manufacturing employment.
Now consider what happens when Europe embraces Chinese manufacturing instead of fearing it. In France, electric vehicles (EV) became the country's leading powertrain for the first time in August, outpacing hybrid, petrol and diesel models. Behind this milestone are Chinese companies that have become deeply embedded in the French EV supply chain. Notably, several Chinese battery manufacturers operate plants in northern France's "battery valley," and Renault's CEO Francois Provost has said the company's partnership with a Chinese battery supplier has helped make its cars more competitive.
In Spain, meanwhile, the factory of the iconic Ebro brand, which once sat idle, was revived with the help of Chinese automaker Chery. The partnership at the former Nissan plant in Barcelona's Zona Franca created 1,000 direct jobs and over 3,000 indirect jobs, meeting key milestones in Spain's reindustrialization strategy.
Meng Yuhong, consul general of China in Barcelona, said the project has not only revived factory operations but also showcased the potential for deeper industrial cooperation between China and Spain.
In Rosslyn, South Africa, Chery's plant retained all 692 employees and is expected to support nearly 3,000 supply-chain jobs, which Deputy President Paul Mashatile said would strengthen the country's industrial capacity. In Bahia, Brazil, BYD's plant employed 5,500 direct workers as of July and is expected to support 20,000 direct and indirect jobs.
Beyond investment, China's clean-energy supply chains have driven down the cost of the global green transition. Over the past decade, the global average cost of electricity from wind and solar power has fallen by more than 60 percent and 80 percent, respectively, thanks in large part to Chinese manufacturing. The International Energy Agency estimates that the global electric vehicle fleet had displaced about 1.7 million barrels of oil demand a day in 2025, with China accounting for roughly 1 million barrels a day.
"Openness and win-win cooperation is the lowest-cost, most sustainable path and best serves Europe's long-term interests," said Wang Yiwei, a professor at Renmin University of China.
In the case of the auto sector, Wang said choosing openness and cooperation means Europe can plug into China's mature new energy supply chain to lower the cost of batteries and vehicle manufacturing, while Chinese companies can draw on Europe's local production networks and mature auto market and brand experience to jointly develop products tailored to European standards.
As Lewis Ndichu of Kenya's Africa Policy Institute put it, the deeper value of Chinese manufacturing investment "lies not simply in the capital invested, but in the capabilities that remain, like skills, technology, suppliers and productive capacity."
This is what Europe, too, can draw on. By choosing openness, Europe can turn the "China Buffer" from a cushion against shocks into a partnership for shared growth. ■
