What will happen if Europe cannot do business with China?
What will happen if you prevent others from doing business?
This is the question Europe poses to Dongda, and it will also be the biggest issue for Europe’s economy and welfare model going forward.
Recently, the editor of the Asian edition of the Financial Times visited Dongda,
meeting many big shots, and he asked only one question. The answer he received may send chills down the spine of all of Europe.
The question is: “The essence of trade is exchange. I buy yours, you buy mine. But in the future, what exactly does China want to buy from Europe?”
The answer is almost none.
Apart from raw materials like soybeans and iron ore, or luxury goods like LV, there are lithography machines that cannot be bought; China can produce everything itself and does it better and cheaper, so how will Sino-European business continue in the future?
Even Macron asked the same question; after his visit to China, he told the French newspaper L'Écho,
"I am trying to explain to the Chinese side that their trade surplus is unsustainable because they are harming their own customers, especially as they are almost no longer importing anything from us.”
Macron's logic is that since Europe cannot make money from exports, how will there be money to continue buying goods from Dongda?
Why do Europeans have such anxiety? Let's look at a set of trade data compiled by L'Écho.
From October 2024 to October 2025, Dongda's trade surplus with the EU reached $310 billion, surpassing the $302 billion surplus with the United States for the first time during the same period.
Since 2019, Dongda's surplus with Europe has nearly doubled, with German industry taking the brunt. From 2019 to now, Germany's exports to China have dropped by 9%, while during the same period, exports from Dongda to Germany have increased by 40%.
Six years ago, Germany maintained a surplus of about $30 billion with Dongda, but now it has turned into a $25 billion deficit. Compared to 2019, manufacturing jobs have decreased by nearly 7%, equivalent to a loss of about 500,000 industrial jobs over six years.
The EU has already described the trade relationship between China and Europe as "extremely unbalanced."
Moreover, major media outlets in Europe and the US are widely citing a recent research report from Goldman Sachs, which has raised its forecast for Dongda's economic scale in 2035, but Goldman Sachs believes that Dongda's current growth model will lead to the shrinkage of other countries.
Because Dongda’s future growth will still mainly come from exports, this means that in the absence of an increase in global total demand, Dongda will seize market share from other countries, and the data projections indicate that Europe will still be the most harmed.
Europe is now facing a double squeeze: also a complaint from Macron, American protectionism is redirecting Chinese goods that should flow to the US entirely to Europe.
Such public opinion is evidently extremely unfavorable to Dongda's trade environment.
Currently, Europe is divided into three factions regarding China,
The first, according to our domestic context, can be called the "surrender faction"; since they cannot win, they prefer to ask Chinese enterprises to invest, at least ensuring employment and tax revenue.
The second faction can be considered the defensive faction, which advocates imposing tariffs on Dongda's goods.
The third faction is the most radical, advocating for a complete shutdown, preventing Dongda's goods from entering.
Politicians are trying every means to enhance the competitiveness of European industry, yet they did not realize that capital has its own logic of action.
For European companies, the only way to enhance competitiveness is actually to move factories to Dongda.
According to another report from the Financial Times, European manufacturers' investment in Dongda reached a new high, with greenfield investment amounting to 3.6 billion euros in the second quarter of last year.
Even 25% of surveyed European companies indicated they want to move production lines to Dongda, a figure that is twice that of those moving away from Dongda.
Why is this happening?
Because from the perspective of commercial capital, surviving is more important than being obedient.
For instance, German automotive parts giants, ZF and Schaeffler, are laying off employees in Europe while simultaneously expanding factories in Dongda, taking advantage of Dongda's lower costs and more extreme supply chains to produce goods for resale in Europe or export to third countries.
In order to compete with Chinese enterprises in the market, German companies are not only coming to Dongda but are also becoming Chinese enterprises, even starting to encroach on the export share of their own European headquarters.
Moreover, European executives believe that Dongda is now the most competitive place in the world, especially in electric vehicles, new energy, and machinery. As long as you can survive in Dongda, you will be invincible globally. If you hide in the greenhouse of Europe, you will eventually be defeated by the muscular competitors from Dongda.
Thus, German enterprises have also become a force that strengthens the deep binding of Europe and Dongda's industrial systems.
The contradictions between China and Europe are not merely contradictions at the level of trade data but contradictions in trade models.
In the logic of Dongda, trade is a means of development, the ultimate goal being to no longer rely on trade and achieve complete autonomy.
However, Europe's previous logic was that trade is the source of welfare, with the aim of making life more comfortable for everyone through division of labor.
Therefore, the ones who ultimately bear the cost will likely be the common people.
The happy lives of European people over the past few decades have been built on a very simple formula:
Excess profits from high-end manufacturing + global cheap resources = high taxes = high welfare
Europe could previously monopolize the global pricing power of industry, but now Dongda has broken that pricing power; cars and chemicals have been reduced to bargain prices, profits have thinned out, and excess profits have disappeared.
With Russian cheap natural gas cut off, energy prices have soared, and cheap energy is also gone,
Companies can no longer pay so much in taxes, resulting in soaring fiscal deficits, reduced welfare, and delayed retirements.
Capital can flee, but the common people cannot; without raising taxes, the people face unemployment, while raising taxes makes them poorer and raises living costs.
The cost of implementing each so-called "strategy" will be transferred to ordinary households' bills through inflation and taxation, eventually resulting in a stronger populist backlash,
And isn't this the prelude to World Wars I and II?
I remember during the Caixin Summit in Singapore, the former Prime Minister of Kyrgyzstan warned that,
Europe has become a spoiled child under decades of American subsidies, gradually losing its competitiveness. If there are no strong political leaders, Europe will only become a museum of the world, and you will just buy a ticket to visit.
So, to put it brutally, this is the moment for Europe to wake up. In the past, it could rely on the US for security, on Dongda for the market, and on Russia for energy, only responsible for enjoying high welfare while losing its survival capability,
Now, geopolitical crises have kicked all countries back to an era where only the most basic security needs are discussed, busy sharpening knives against each other, only focusing on survival,
So Europe’s holiday is over, and the internal competition of all humanity has just begun.
