Europe's response to China Shock 2.0: Hold China closer

The first China shock that devastated manufacturing in the U.S. in the early 2000s bypassed large parts of Europe. A second shock now under way looks much more threatening. But rather than simply erect ever higher barriers to the flood of Chinese imports, as the U.S. has done, European leaders are seeking an alternative: rolling out a welcome mat. European officials have largely been in favor of investments from Chinese battery makers such as CATL and from Chinese electric-vehicle manufacturers such as BYD in Hungary and Chery Automobile in Spain. In the 1980s, faced with a wave of low-cost Japanese…