No. 1025 - China Shock 2.0: structural drivers and implications for the euro area

Questioni di Economia e Finanza (Occasional papers)
by Valentina Aprigliano, Lorenzo Bencivelli, Alessandro Borin, Francesco Paolo Conteduca, Francesco Corsello, Stefano Federico, Claire Giordano, Fabrizio Leone, Michele Mancini, Ludovic Panon, Lilia Patrignani and Stefano Pica
June 2026
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The work uses descriptive analysis and econometric estimates based on data on international trade, prices, production and investment to identify the drivers of the sharp increase in Chinese exports in recent years and assess its implications for the euro area.

About three quarters of the growth in Chinese exports between 2023 and 2025 can be attributed to weak domestic demand in China. Public subsidies also appear to have made a significant contribution, while the role of US tariffs is more marginal. The main implications for the euro area are downward pressures on consumer prices for non-energy industrial goods and stronger competition, both in the domestic market and abroad, with which the euro area's manufacturing sector must contend, leading to lower investment and exports.

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  1. 17 June 2026
    No. 1025 - China Shock 2.0: structural drivers and implications for the euro area
    PDF 4 MB

    (only in Italian)