The China shock re-visited

Organised by

• Robert Schuman Centre for Advanced Studies
• EGPP: European Governance and Politics Programme

The paper connects the discontent often driving support for radical-right parties in Europe with changes in consumption behaviour potentially linked to trade globalisation and increased import penetration from China. Unlike the standard literature, the "China syndrome" not as a competitive but a consumption shock. Low-income groups obtain access to consumption goods they would have not been able to afford prior to global market integration (i.e. washing machines). Middle-income groups, observing their consumption behaviour becoming similar to those of low-income groups and distinct from high-income groups—who can afford (non-made-in-China) top of the line products— feel they are 'losing out' compared to other groups in the same society. This perceived decline in social status or relative material deprivation fuels resentment, possibly leading to support for radical-right parties or alienation from mainstream parties.