The China Shock 2.0 could destroy Europe as we know it

“China Shock 2.0: the cost of Germany’s complacency” is the title of a new report by Sander Tordoir and Brad Setser for the Centre for European Reform. They said Germany was in the eye of the storm. Its core industries are being squeezed out of the Chinese market, third countries, and its own home market, all at the same time.

“Much of the demand generated by Germany’s fiscal expansion could leak straight into Chinese imports and throttle Germany’s recovery,” they said.