Europe’s new China playbook

This week, Mark Leonard welcomes Andrew Small, head of ECFR’s Asia programme, to discuss how Chinese industrial overcapacity is threatening European deindustrialisation—and what Europe can do about it.

Over the summer, Europe’s approach to China shifted markedly. At the June 2026 European Council, leaders were largely united in seeing the surge of Chinese exports as a serious threat to European industry. They also tasked the European Commission to make one last attempt to negotiate a trade deal with Beijing.

Days before the talks began, a leaked paper co-authored by France and Germany set out a tougher agenda for the EU’s China policy. On October 9th, after two days of negotiations in Beijing, the EU’s trade and economic security commissioner, Maros Sefcovic, announced that the first result was volume limits on hybrid vehicles, the biggest problem for Europe’s car industry, and that China has accepted the proposal.

This week, the European Council in Brussels is returning to the issue, and Mark and Andrew discuss where the EU-China trade talks stand. What is behind the Franco-German paper? What options does the EU have to deal with the China shock 2.0? And what is at stake for Europe’s economy?

This podcast episode was recorded on October 16th 2026.

Bookshelf:

Institutional Genes: Origins of China's Institutions and Totalitarianism, by Chenggang Xu

The art of the swarm: Systemic rivalry with China on European terms, by Andrew Small

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