European leaders are being urged to make challenging decisions about which industries to prioritize and which to concede in the face of increasing competition from China. A group of french and German economists has advised Europe to strategically support specific sectors while accepting defeat in areas where China has already gained a significant advantage, such as the solar power sector.

These recommendations were detailed in five memos presented to the Franco-German Council of Ministers, commissioned by the French and German governments. The memos addressed various aspects of the economic relationship with China,including trade,defense,energy,economic growth,and the labor market.

The economists suggested that Europe should focus on protecting sensitive industries like defense, space, and robotics, while opening up mature industries to imports from China. They also expressed openness to Chinese investment in crucial technologies such as batteries, provided that technology transfer occurs, according to a summary from the Franco-German Council of Economic Experts.

Jean Pisani-Ferry,a French economist and co-author of the memos,highlighted solar panels as a prime example of an industry where Europe should accept its losses.

The Solar Panel Situation

“Chinese industry is far ahead of everyone else and there’s no longer a solar panel industry in Europe,” he told French TV channel BFMTV Business last Friday.

“chinese industry is far ahead of everyone else and there’s no longer a solar panel industry in Europe.”

He added, “Ultimately, its not such a big deal as solar panels stay in place once installed. They do not create a dependence, unlike gas, which you need every day. Hence, it’s a technology in which we have to admit that we’ve lost the battle.”