China Shock 2.0: This Time It's Europe, with Adam Tooze

Last week in Brussels, EU leaders held their first sustained debate on China policy in three years, and were so wary of Beijing’s reaction they wouldn’t print the word “China” on the agenda. The trigger: a goods-trade deficit closing in on 360 billion euros, and, for the first time ever, all 27 member states in the red. Recorded at Summer Davos in Dalian, I sat down with economic historian Adam Tooze to ask why the panic, and why now. Polanyi, the Plaza Accord, “glut shaming,” a $1.2 trillion surplus, and what Europe and China each most need to understand about the other.

04:26 – Why the alarm now? Imbalances are decades old, so what changed—and the shift from China slotting into Western supply chains to climbing the value chain

07:04 – Karl Polanyi, the “double movement,” and how the European working-class question becomes the politics of right-wing populism

11:21 – Autos as the core of the fight—12 million jobs—and why the Ukraine alignment gives the whole thing its moral charge for von der Leyen

14:14 – “Glut shaming”: the accusation of illegitimacy baked into the Western framing, and how it lands on a Chinese ear

18:16 – Wěiqu (委屈)—the swallowed sense of being wronged and why the EU should exercise a bit of cognitive empathy

20:14 – Merz reaches for the 1985 Plaza Accord, and the empathy gap that lets a German politician miss what that signals in Beijing

22:00 – The currency-manipulation argument, Germany’s own history with the euro, and why Switzerland is the real manipulator

25:49 – The $1.2 trillion surplus—”nothing we’ve ever seen before”—and the consumption China refuses to do

26:12 – Sorting the sectors: solar, batteries, and EVs where resistance is futile, versus steel and shipbuilding as “Polanyi double-movement as cosplay”

32:04 – The Draghi report and the house of mirrors: is China the cause of Europe’s malaise or just the thing exposing a homegrown one?

36:27 – If Tooze had von der Leyen’s ear: investment-linked talks, phased protection with a clear exit, and “investment, investment, investment”

41:16 – The October clock on the U.S.–China truce, and why this autumn could get very ugly

43:09 – Closing advice: what Europe and Beijing each most need to understand if this ends in managed rebalancing rather than a trade war

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