Polish manufacturers seek EU protection against Chinese competition

Rising Chinese industrial exports and Beijing’s growing control over supply chains are putting pressure on Poland’s manufacturing sector, particularly household appliances and automotive production.

As Chinese-made industrial goods flood the European market and European manufacturers lose ground in China, Polish industrialists warn they may struggle to cope with the competition.

Wojciech Konecki, president of the Polish Association of Home Appliance Employers (APPLiA Polska) and vice-president of the National Chamber of Commerce, told Business Insider Polska: “The Polish household appliance industry has fallen into a very difficult situation. Five factories have already closed in Poland in a relatively short period. The main reasons are falling consumption and competition from China. Chinese appliances are no longer always much cheaper, but in many segments their quality has reached an acceptable level for European consumers. As a sector, we have rapidly run into major difficulties.”

Konecki added: “China is taking over entire supply chains. A factory closure does not only mean job losses at that facility. Behind the household appliance industry stand thousands of subcontractors, mostly small family businesses, as well as logistics firms, research and development centres, and local services.”

Similar pressure is visible in other sectors, such as Poland’s automotive supply industry.

China expands industrial export share in Europe

In 2025, industrial goods accounted for 97% of China’s exports to the European Union (EU).

Last year, EU imports of goods from China rose 6.4% year-on-year to €559.4 billion, while EU companies’ exports to China fell 6.5% to €199.6 billion, widening the bloc’s trade deficit to €359.8 billion.

Compared with 2015, imports from China increased by 89%, whereas export growth was more limited at 37.1%.

Machinery and vehicles made up 54.4% of shipments, other industrial goods accounted for 33%, and chemicals represented about 10%, as Europe now imports products from more advanced links in the value chain rather than textiles and toys.

According to Eurostat data, Europe’s imports from China rose 7.9% in the second quarter of 2026 compared with the same period a year earlier.

Data from the Polish Development Fund (PFR) show that China overtook Germany for the first time this year to become Poland’s largest supplier of goods.

PFR calculations show that imports from China reached €6.15 billion in July 2026, while imports from Germany stood at €6.06 billion. A year earlier, Poland imported €4.78 billion worth of goods from China and €6.17 billion from Germany.

The European Central Bank (ECB) notes that China’s share of the European market is growing rapidly, particularly in electronics, automotive, and other advanced industrial sectors, and that its delivery structure is shifting from final products to intermediate goods and components.

“Rebuilding industry is much harder than sustaining it,” Konecki said. “Once factories, competencies, suppliers, and research and development infrastructure disappear, it is not possible to recreate them with a single political decision.”

Automotive and supply sectors face order losses

Unlike the first wave following China’s accession to the World Trade Organization in 2001, this process, which companies in Germany call “China shock 2.0”, affects medium- and high-technology sectors and is also hitting plants in Poland.

In the first five months of 2026, Germany’s imports from China rose 6.2% to €72.4 billion, while its exports fell 14.5% to €29.6 billion.

Bartosz Mielecki, director general of the Polish Automotive Group (PGM), said: “Chinese brands are taking up more and more space in the European market, and the Polish sector is feeling it. The crisis among European carmakers means reduced order volumes directed to factories operating in our country, which indirectly hits Polish suppliers.”

According to data from the Automotivesuppliers.pl platform, exports of parts and accessories in the automotive sector, which accounts for about 8% of Poland’s gross domestic product, fell to €9.42 billion in the first half of 2026 from €9.45 billion in the same period a year earlier.

Noting that authorised dealer and service networks are also expanding as vehicle sales rise, Mielecki said: “The next step for Chinese manufacturers could be moving parts and components production to Europe. We are not observing this on a large scale at the moment, but the situation is developing very dynamically. This is a scenario the Polish automotive industry must be prepared for.”

Mielecki noted that factories in Poland are more diversified and resilient than commonly thought, but added that if car production across the continent continues to fall, plants and suppliers in Poland will be affected more strongly.

Industry representatives demand protective measures

According to an analysis by the Centre for Economic Policy Research (CEPR), China’s global surplus in goods trade hit a record $1.2 trillion in 2025.

Behind this expansion lie subsidies and technological progress, alongside weak domestic demand pushing Chinese companies to seek buyers abroad, industrial deflation, and an exchange rate that boosts exporters’ price competitiveness.

Stressing that tariffs on electric cars alone may not be enough in the automotive sector, Mielecki said: “There is increasing talk of ‘local content’ rules that would reward cars with a higher share of components produced in Europe. Such a solution would support not only vehicle sales, but also European factories and the entire supply chain.”

Konecki, meanwhile, argued that the Carbon Border Adjustment Mechanism (CBAM) proposed for the household appliance sector falls short of expectations.

“Europe adopts protective measures with great delay and often does so selectively,” Konecki said. “The CBAM mechanism is set to cover some final appliances, but the relevant regulations will only enter into force in 2028. For some companies, waiting three years could mean there is nothing left to protect. Moreover, while the regulations cover washing machines, refrigerators, and dryers, dishwashers, ovens, hobs, and extractor hoods have been excluded. As a result, a bureaucratic decision could determine which factory survives and which closes.”

Noting that some Western companies, as seen in the cases of Philips and IBM, have withdrawn from the consumer market to focus on higher-margin corporate or medical devices, Konecki added that it is difficult to point to an easy way out of the current situation in the household appliance industry.