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The 'new China shock' narrative exposes systemic vulnerability in Europe's supply chain dependency, mirroring 2000s US manufacturing collapse but with critical differences: EU's green industrial policy (CBAM) and stronger trade defense tools may mitigate damage. This accelerates the global 'de-risking' trend, pushing capital toward non-sovereign assets as nations prepare for economic fragmentation.

Trade analysts warn that rising imports of Chinese components could lead to a new China shock, threatening European industries.