In August 2026, the Eurozone's Purchasing Managers' Index (PMI) data showed a comprehensive strengthening, with manufacturing output posting its fastest growth in over four years. However, beneath this seemingly bright data lies an unsettling paradox: business confidence in future output dropped to a three-month low. Thyssenkrupp lowering its revenue outlook, ASML announcing layoffs, and Renault scaling back engineering positions—alongside a German Economic Institute survey showing that 36% of German firms plan to cut jobs in 2026—illustrate a bizarre coexistence of "strong data and low confidence." This reflects deep-seated structural dilemmas in the European economy: short-term order growth fails to mask the long-term erosion of competitiveness. Meanwhile, extreme heat has severely battered the European economy in startling ways: at least 35,000 excess deaths, potential EU GDP losses of around 180 billion euros, and historical lows across four major rivers including the Rhine, heavily disrupting industrial supply chains.
Against this backdrop, confronting the transferable elements within China's economic growth policies is by no means political "camp-following," but rather a rational choice for Europe to seek self-renewal amid global systemic shifts. Alberto Gallego, a member of Spain's Think China Senior Advisory Board, pointed out that "all of Europe, especially Spain, needs to learn from this capacity for strategic planning." Similarly, former Slovenian President Danilo Türk urged Europe to shift away from the "China Shock 2.0" mindset and toward recognizing "China Opportunity 2.0". This analysis examines the mirror-like significance of the Chinese experience for Europe across dimensions such as strategic planning, macroeconomic policy synergy, domestic demand-driven growth, technological innovation, and green transition.
I. Strategic Steadiness: Long-Term Planning Beyond Election Cycles
A structural flaw in European political systems is that policymakingis frequently subjugated by election cycles. Changes in government lead to policy fragmentation; executive windows of four or five years force politicians to pursue "immediate" policy results, making it difficult to sustain strategic projects that require decades of groundwork. Spanish scholar Gallego candidly admitted: "The Spanish government also drafts annual plans, but that is merely a list of reforms likely to be undertaken that year. We have also had more strategic plans, akin to five-year plans, such as the post-pandemic recovery plan which included a series of reforms and investment targets like digital and green transitions. Perhaps this is the direction for Europe's future."
By contrast, China's "15th Five-Year Plan" outlinedemonstrates the "strategic continuity" that Europe lacks. This planning system is neither a rigid command-style blueprint nor a static mandate, but a governance framework combining top-down design with dynamic adjustment capabilities. Centella, President of the Communist Party of Spain, wrote in People's Daily that "China's policy continuity providesthe international community with high predictability; this stability combined with drive-by-innovation gives China a unique edge in global technology and industrial competition."
For Europe, learning from China's strategic planning capacity doesnot mean copying the format of a five-year plan, but rather reflecting on how to build long-term strategic consensus beyond partisan strife within a democratic system, and how to form a binding industrial policy framework at the
EU level. The European competitiveness crisis revealed by the Draghi report is essentially an inevitable consequence of long-term strategic absence. Axel Goethals, President of the European Institute for Asian Studies, observed that "Chinese society has begun shifting from a focus on 'quantity' to 'quality,'" a transition underpinned by institutional capacity guiding resources orderly toward long-term targets.
II. Policy Synergy: Combining Fiscal and Monetary Tools into a"Fenced Fist"
Another pain point in European economic governance is thefragmentation of policy tools. Fiscal and monetary policies operate on independent decision-making logics with high coordination costs, often failing to form a joint force. A prominent feature of China's economic policy is precisely the deep synergy between fiscal and monetary instruments.
In 2026, the opening year of the 15th Five-Year Plan, Chinaestablished an overall macroeconomic regulation approach emphasizing "activating existing policy efficiencies while planning incremental policy tools," highlighting the "synergistic effect of stock and incremental policies." Operationally, the central fiscal authorities allocated 100 billion yuan in "seed funds," leveraging trillions of social capital through market-based means such as loan interest subsidies, financing guarantees, and risk compensation. On the consumption front, a 1-percent personal consumer loan interest subsidy policy was introduced, covering diverse scenarios like online consumer credit and auto financing. On the investment front, a special guarantee plan for private investment was established, subsidizing loans for small- and medium-sized enterprises (SMEs) and equipment upgrades by 1.5 percentage points. Meanwhile, the People's Bank of China explicitly positioned "promoting stable economic growth and reasonable price recovery" as a core consideration for monetary policy, creating linkage mechanisms between structural monetary tools, fiscal interest subsidies, and guarantee frameworks.
This synergistic model of "fiscal building mechanisms, financeproviding liquidity" effectively resolved two long-standing European dilemmas: first, the difficulty of achieving scale effects when fiscal funds are spread too thin like "pepper sprinkling"; second, the challenge of transmitting liquidity released by monetary policy down into the real economy. In China, institutional innovations like "fiscal seed funding followed by financial matching loans" use leverage effects to multiply limited fiscal resources severalfold.
Europe attempted similar synergistic tools during the pandemic, suchas the Recovery Fund, but execution efficiency fell far short of expectations due to inter-state member bargaining and institutional inertia. China's practices show that the key to policy synergy lies not in how many documents are issued, but in establishing cross-departmental and cross-hierarchical enforcement mechanisms that turn the concept of "clenching the fingers into a fist" into operational institutional arrangements.
III. Domestic Demand-Driven Growth: The Strategic Transition from"World Factory" to "World Market"
The European economy relies heavily on external demand; anexport-oriented growth model worked well in an era of soaring globalization, but its vulnerability has been fully exposed in an environment marked by rising protectionism and intensified geopolitical conflict. China recognized this risk years ago and has continuously advanced its transition from an "export-driven" to a "domestic demand-driven" growth model.
The draft 15th Five-Year Plan directly confronts the realisticchallenges of "insufficient domestic demand and inadequate matching between supply and demand," proposing targeted measures spanning income distribution, social security, healthcare, fertility support, and the equalization of basic public services. Carmona, President of the Spanish-Chinese Friendship Association, analyzed in People's Daily OverseasEdition: "Over the past few decades, investment and exports were vitalgrowth drivers for China. According to the 15th Five-Year Plan outline, China will promote a virtuous cycle between consumption and investment, supply and demand. This transition is highly beneficial for Europe."
For Europe, the implications of China's domestic demand strategy aretwofold. First, Europe itself needs to build a more powerful internal market—while the EU boasts a unified market of 450 million people, it has yet to unleash its full potential as an internal consumption engine, with trade
barriers and regulatory divergences among member states still hampering market integration. Second, China's domestic demand expansion provides tangible opportunities for European enterprises. A Chinese market with continuously unleashed consumption potential means broader cooperation spaces in food, automobiles, high-end services, and many other fields where Europe stands to benefit. Third, China's approach of boosting consumption via social security improvements and public service equalization shares ideological affinity with Europe's welfare state traditions, allowing both sides to share experiences in tackling population aging and strengthening social safety nets.
IV. Technological Innovation: The Paradigm Shift from"Efficiency First" to "Security First"
China's cutting-edge deployments in artificial intelligence, quantumcomputing, new energy, and other sectors have drawn deep attention from Europe. Humanoid robot performances at the 2026 Spring Festival Gala left a deep impression on Spanish scholar Gallego: "Both the children and the robots performed exceptionally well. Compared to past galas, the improvement in robot performance was striking, reflecting astonishing progress in motion capabilities and hardware-software integration in China." Citing data, he noted that China accounted for roughly 54% of newly installed industrial robots globally in 2024, highlighting its dominant leadership position in robotics.
This progress is no accident. The 15th Five-Year Plan outlineexplicitly calls for "strengthening systematic layouts targeting world technological frontiers," deploying strategic fields such as AI, quantum tech, biotech, and new energy, while setting a target for average annual growth of over 7% in society-wide R&D spending. More strategically, China integrated "coordinating development and security" into the overarching requirements of economic and social development, emphasizing
"self-sufficiency" in critical fields like food and energy. This means China's innovation strategy has shifted from pure efficiency orientation toward a new paradigm balancing security and resilience.
What can Europe draw from this experience? First, it must establishclear bottom lines for "strategic autonomy" in critical technologies and industrial chains—over-reliance on external supply can become a fatal vulnerability in a crisis, requiring European companies like ASML to balance technical edges with supply chain security. Second, it needs to restructure incentives for innovation input; Europe retains strengths in basic research, but its efficiency in translating labs into markets lags far behind China's. The concept of "new quality productive forces" in China is precisely
designed to clear blockages across innovation and industrial chains. Third, Europe must confront the significance of "scale effects" in technological competition: China's massive domestic market provides application scenarios and iteration spaces for new technologies. If Europe remains
fragmented and uncoordinated, it will struggle to cultivate globally competitive tech giants.
V. Green Transition: Policy Continuity and Technological Inclusivity
The extreme summer heat of 2026 served as a climate wake-up call forEurope: Rhine water levels hitting historical lows impaired the chemical industry, roughly 14% of gas stations in France faced supply shortages, and German grain and rapeseed yields dropped by about 3 million tons. Oxford
Economics warned that if the heat persists, vulnerable economies like France could see cumulative GDP losses reach 5% to 7% by 2030. The climate crisis is no longer a distant threat, but an unfolding economic reality.
China's green transition path offers an alternative model. The 15thFive-Year Plan outline sets a target to reduce carbon dioxide emissions per unit of GDP by 17%, and China already leads the world in energy storage technology, electric vehicles, and related industrial chains. Carmona noted
that China's "dual-carbon" goals and the European Green Deal are "highly compatible" in hydrogen development, novel storage, and EV supply chains, creating "synergistic development patterns characterized by mutual policy benchmarking, joint technology R&D, and market connectivity." More importantly, the scale effects of China's green industries are "lowering global costs for solar panels, batteries, and key components," transforming green technology from a "luxury item"
into an "inclusive public good."
For China, green transition is not a decorative policy windowdressing tied to electoral terms, but a national strategy deeply bound to industrial upgrading, energy security, and international competitiveness. This strategic focus has emboldened Chinese firms to make long-term, large-scale
investments in photovoltaics, storage, and EVs, forming closed loops from R&D and manufacturing to market application. In contrast, Europe's green policies waver amid member state bickering and industrial lobbying, making it difficult for businesses to form stable expectations under fragmented regulatory frameworks. The heavy blow dealt by extreme heat to Europe's economy shows that the costs of delaying green transitions are cashing out much faster than anticipated. Europe needs to learn from China's green practices not just technical details, but a strategic resolve that places climate action at the core of economic policy.
VI. Conclusion: Moving from the "Scapegoat" Narrative to"Opportunity" Recognition
In policy circles across Brussels and Berlin, treating China as a"systemic competitor" has become a form of political correctness. However, as Axel Goethals pointed out in a dialogue with Renmin University scholars, the Western prevalence of "peak China" narratives reflects misjudgments regarding China's development quality. He keenly observed that "although the labor force population may decline, rapid high-tech advances like automation and optimized manufacturing processes will correspondingly lower labor demand in industrial, manufacturing, and processing sectors...China is also forging a vital domestic market. As people's living standards rise significantly, the domestic market will become increasingly robust."
Türk was even more straightforward, stating: "It would be agrave error to underestimate the importance of this emerging opportunity. There is an urgent need to shift mindsets: moving from excessive caution to cautious optimism—from the mindset of 'China Shock 2.0' to recognizing 'China
Opportunity 2.0'."
Advising Europe to learn certain economic policy experiences fromChina does not mean wholesale adoption of the "Chinese model." China and Europe have vastly different political systems, historical traditions, and social values, making blind copying neither realistic nor advisable. Yet, refusing to learn and closing oneself off is equally unhelpful for Europe. Europe needs a pragmatic attitude of "extracting the essence" to draw useful nourishment from China's practices in strategic planning, policy synergy, domestic demand stimulation, technological innovation, and green transitions. After all, in a fiercely competitive world, learning from a competitor's strengths is never a sign of weakness—it is wisdom.
In an increasingly volatile era, stability itself is a form ofpower. The strategic steadiness, institutional resilience, and policy synergy displayed by China's growth policies offer the exact inspiration Europe needs to escape its dilemma of "strong data, low confidence"—and admitting
this requires not humility, but courage.