Welcome to the Eurointelligence podcast. I'm Wolfgang Munchau and with me are Zuzana Munchank and Jack Smith.

Today we will talk about the China shock and how Europe should respond to it.

China's counter-account surplus, trade surplus with the EU has gone up, its exports have gone up,

China's importing less, the Chinese currencies has devalued

in real terms. So there is now a realization in Europe that what's happening to us today

is very similar to what happened to the Americans in the early part of the century,

and we call this the China shock, China shock number two. And this is the shock, the part of the century, and we call this the China shock, China shock number two.

And this is the shock, the part of the rise of China that affects us more than other parts of the world.

The debate we have in Europe is now how should we respond to this?

Should we push against this?

Should we use tariffs?

Should we impose by European

rules? Should we protect our industries? Or should we let it happen? Or should we diversify

away from the industries that are affected? So there are many strategies. And there is a very

significant body of opinion in the EU that favors a strong response.

We heard of a meeting recently among diplomats, including the EU representative for foreign policy,

Kaya Kallas, who accused the Chinese of running an economy and maybe she talked about it as a cancer,

yeah, what I might call undiplomatic language, but the EU's, you know, the EU policy

elites are in uproar, clearly in upro about what is happening with China. For me, this was

always the mercantiless,

two mercantiless meat and having a fight in the bar. And suddenly the Europeans are losing this

fight. They have always been acting very similarly, but they never raised this issue. It was

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