Home advantage: China’s challenge to European industry

China’s vast yet protected home economy in a series of sectors has allowed some of its firms to acquire a scale that provides them with advantages when they compete in global markets. These firms are often able to undercut European peers both in the EU and around the world. This growing disadvantage vis-à-vis China weakens Europe in sectors key to its future economy and security, from new energy to telecommunications.

The EU urgently needs to incorporate the concept and reality of the ‘home market advantage’ into its thinking on the right toolbox for dealing with China. An integrated policy approach, working with like-minded partners around the world, can enable Europe to strengthen its own industries as Agatha Kratz and Janka Oertel outline in their policy brief.