EU’s manufacturing muscle
Some feel worried that the United States’ intensified efforts to bring US manufacturing enterprises overseas back to the US will directly affect China. However, the rejuvenation of the US manufacturing, if it materializes, is expected to have the most direct repercussions for Europe, given the similarity of Europe’s industrial structure to that of the US.
Compared with Europe, the US enjoys more attractiveness in terms of energy prices, owing to its exploitation of shale oil and gas resources. While the high-welfare and high-tax policies widely adopted by European countries also give the US an upper hand.
And in contrast to the Barack Obama administration’s firm implementation of policies encouraging the reshoring of US manufacturing enterprises and president-elect Donald Trump’s vow to hit US enterprises that shift production lines overseas and cut taxes for US-based ones, the United Kingdom’s impending breakaway from the European Union and the emergence of populist forces across Europe have increased the pressures on the bloc and put European manufacturing in an even more disadvantageous position.
However, the improved manufacturing situation in Germany, France, Italy, Spain, and the UK indicate European manufacturing has not yet been excessively affected by a reviving US manufacturing sector.
European countries’ traditional industrial foundation and leading technologies in such fields as robots mean that Europe’s manufacturing advantages will unlikely be crippled. And concurrent with the US’ bid to revive its manufacturing are the formulation and implementation of policies by European countries aimed at their industrial revival.
Besides Germany, at least another 10 EU countries have also mapped out national strategies to promote their manufacturing upgrading and improvement.
The strengthening, not weakening of European manufacturing in the face of the US’ re-industrialization strategy offers China experiences from which it can learn how to deal with an ever-fiercer manufacturing competition worldwide.