with German firms suffering some of the heaviest losses in the machinery and transport equipment sectors.

In recent years, China has expanded its global footprint by focusing on the production of higher value-added and technology-intensive goods, thereby competing directly with established European exporters, the ECB said in a statement.

The EU’s share of global goods exports has declined, particularly in sectors and markets where China has strengthened its position—most notably in machinery and transport equipment—according to an article in the ECB’s Economic Bulletin.

Among the largest EU nations, Germany’s export structure bears the greatest resemblance to China’s, while Italy’s shows the least overlap, the document notes. Smaller countries, including Ireland and Greece, were among those least affected by this trend.

The ECB noted that this reflects intensifying competition in sectors that have served as key growth drivers for several European economies over the past few decades, such as automotive manufacturing and industrial machinery.