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

**SPEAKER_1** (0:01)
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What is that?

**Adam Tooze** (0:32)
Yeah, it's a World Cup holder.

**SPEAKER_1** (0:35)
Like the soccer tournament World Cup holder? For the world.

**Adam Tooze** (0:38)
Fits every car, holds every cup. It has a Carvana logo?

**SPEAKER_1** (0:41)
Carvana made it.

**Adam Tooze** (0:42)
They buy and sell cars, so they made a car cup holder.
So, got any good cups lately? Used to. Just couldn't figure out where in the world to put them.

**SPEAKER_1** (0:51)
The World Cup holder.

**Adam Tooze** (0:52)
Brought to you by Carvana.

**SPEAKER_1** (0:53)
Proud sponsors of the World Cup holder.

**Kaiser Kuo** (0:56)
Sign up today to win yours at cupholder2026.com. Not authorized or endorsed by FIFA. Not a real product for parody and fair use purposes only.
Welcome to this special edition of the Sinica Podcast, a weekly discussion of current affairs in China. Coming to you this week from Dalian, from the Davos On Air booth at the World Economic Forum's annual meeting of the new champions, otherwise known as Summer Davos. In this program, we look at books, ideas, new research, intellectual currents and cultural trends that can help us better understand what's happening in China's politics, foreign relations, economics and society. Join me each week for in-depth conversations that shed more light and bring less heat to how we think and talk about China. I'm Kaiser Guo, and for over 20 years now, I've had the privilege of working as an official writer for the World Economic Forum, as some of you listeners will know. This year, they've asked some podcasters to team up with them to bring you shows under both the WEF banner and the banner of their own shows. I am delighted to be able to do this with Sinica. Listeners, please support my work by becoming a paying subscriber at sinicapodcast.com. I do need your help to keep doing this. Please subscribe so I can continue to bring you these conversations.
Last week, in Brussels, the leaders of the European Union's 27 member states sat down to a working dinner. The single item on the menu read, Global Macroeconomic Imbalances and Their Implications for Europe's Competitiveness and Prosperity. Everyone in the room knew precisely what was actually being discussed and that, of course, was China. As one diplomat put it, We all know the imbalances discussion is about China.
It was the first time in three years that EU leaders had held a sustained debate about China policy and they were so wary, I guess, of Beijing's reaction that they wouldn't even print the word on the agenda.
The numbers behind that dinner are quite stark. In 2025, the EU's goods trade deficit with China reached very nearly 360 billion euros. So if you think about that, it's close to a billion euros a day, cumulative, so the largest so far in the bloc's history. For the first time ever, every single one of the 27 EU member states was actually running a deficit with China. Jens Eskellund, who heads the EU Chamber of Commerce in Beijing, captured the mood with an image that stuck. The relationship, he said, is less a partnership than a giant container ship that sails to Europe, stacked high, and comes back to China nearly empty. By the end of the dinner, according to reports, the leaders had handed Commission President Ursula von der Leyen a mandate to develop new and, in the words, one official, very powerful tools, while carefully framing it all as resting on two pillars, European unity, of course, and dialogue with China. So that's the mood music. Now, here's why I wanted today's guest, in particular, for the past couple of years, as this overcapacity and imbalances panic has built across the West, one of the very few prominent voices willing to look at in the eye and ask, wait, why are we panicking and why now?
He has been my guest many times now on Sinica. Sinica listeners will know him well. But, and this is what makes him, I think, the perfect person for this conversation. He is not some apologist because he's also quite candid about the fact that there really is a China shock 2.0, that it's unlike anything we've ever seen and that this time, the principal target is not the United States, it is Europe. Adam Tooze has been on the show, as I said, a bunch of times, most recently just a couple of months ago after the China Development Forum, in an episode that we rather cheekily titled, Adam Tooze is China Maxing. Adam is an economic historian at Columbia University, where he directs the European Institute. He's the author of a shelf of indispensable books, The Wages of Destruction, Crashed, Shutdown. He is the force behind the essential chart book newsletter, the co-host of the Ones and Twoes Podcast. He's also got a book on the energy transition on the way, which I very much want to get my hands on. Adam, welcome back to Sinica. Great to see you again here in Dalian.