Why Isn’t Europe Diversifying from China?
Over the past seven years, the US and Japan have diversified their trade, sourcing, and investment away from China. The European Union has not, despite having derisking policies in place. In their article for the
Rhodium Group, Agatha Kratz, Camille Boullenois and Jeremy Smith explain why the European Union (EU), in contrast, has deepened its trade and investment relationship with China, even as European concerns about economic dependencies grew in the wake of the COVID pandemic and rising geopolitical tensions. Three factors explain this gap: Europe has maintained much greater openness to Chinese clean tech imports in the context of an early and fast-paced green transition agenda; high energy prices in Europe in the wake of Russia’s invasion of Ukraine have fueled a rise in lower-priced Chinese chemicals imports; and US and Japan have diversified away from China faster in low-tech goods.
https://rhg.com
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