Ten years ago, economists Gordon Hanson, David Autor and David Dorn identified what they called “the China shock.” That referred to the supercharged economic growth in China triggered by its entry into the World Trade Organization in 2001 and the access to U.S. and European markets that followed. The ensuing flood of low-cost imports is reckoned to have cost 2.4 million U.S. jobs.

Now, they warn of “China shock 2.0.” In this case, China, building on that export base, expands its prowess to leading technologies. China shock 2.0 threatens to inflict similar damage on Europe and displace the U.S. as the world’s leading technology power. Developed economies are waking up to the threat, but their........

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