China Shock 2.0 Sector Impact & Trade Flow Matrix

Bilateral Macroeconomic Flow Simulator & Industrial Overcapacity Stress-Test Workbench

Reuters Intelligence Grounded
EU Market Share Delta -14.8% Domestic output displacement
US Market Share Delta -4.2% Direct US import penetration
Emerging Market China Share +28.5% Trade diversion & absorption
EU Sector Margin Compression -420 bps Corporate profitability squeeze
Global Diversion Index 0.82 Corridor redirection intensity (0.0-1.0)
Interactive Bilateral Trade Corridor Flow
Electric Vehicles & Clean Tech
Sankey Dynamics: Industrial subsidies drive China export overcapacity. High protective tariffs in North America and Europe force secondary export diversion into Latin America and SE Asia.
Multi-Sector Exposure & Macro Shock Matrix
Sector Name Subsidy Rate US Tariff EU Tariff EU Margin Impact EM Share Growth Diversion Index

Structural Divergence: China Shock 1.0 vs. China Shock 2.0

Shock 1.0 (2000s): Driven by WTO accession, labor cost advantage, and low-tech manufacturing (textiles, furniture, basic electronics). Primary impact was felt in blue-collar employment across developed economies with consumer deflationary benefits.

Shock 2.0 (2020s): Driven by massive high-tech industrial policy, green tech overcapacity (EVs, lithium batteries, solar equipment, advanced legacy chips), and high capital intensity. Threatens high-margin manufacturing output in Germany, Japan, and the US, forcing aggressive trade regionalization and secondary dumping in developing nations.

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