EU demands China reduce trade imbalance — South China Morning Post
A European Commission delegation is holding talks with Chinese officials in Beijing, seeking to find a diplomatic way by October to avoid a trade confrontation. The EU is seeking steps from China to reduce its surging exports to the bloc and the trade imbalance that Brussels has called unacceptable.
The talks were led by Denis Redonnet, the EU's chief trade enforcement official. At the end of the month, Ditte Juul Jørgensen, a senior EU trade official, is due to arrive in the Chinese capital. She told the European Parliament that China is participating in the talks, but the challenges remain “very, very significant,” the South China Morning Post reports.
Brussels' concerns
In July, China increased its trade surplus with all but three EU member states compared with the same period last year. Jørgensen pointed to growing dependence on China, particularly in strategic sectors, as well as the European Union's increasing trade deficit.
The European Commission suspects that Chinese exports are supported by undeclared subsidies, an undervalued currency and excess production capacity. Brussels believes these factors make it possible to supply goods to Europe at prices below those offered by local producers.
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European Commissioner for Trade Maroš Šefčovič said Brussels is working on specific proposals for the Chinese side. According to him, without action from Beijing, it will be considerably more difficult to discuss these issues.
A decision is expected in October
Beijing has made conciliatory statements about reducing its large trade surplus with the EU. At the same time, according to the publication's assessment, China may prefer to increase purchases of European goods rather than make changes concerning the structural causes of the imbalance. Brussels expects the talks by October to demonstrate a practical result.
The meetings in Beijing are expected to influence the tone of European Commission President Ursula von der Leyen's State of the Union speech on September 16. A meeting between Šefčovič and his Chinese counterpart Wang Wentao is scheduled for the second week of October. If the talks yield no results, von der Leyen may announce new instruments or investigations. Jørgensen also confirmed the development of a diversification mechanism that could potentially require companies in critical sectors to increase the number of suppliers.
German Chancellor Friedrich Merz said he had instructed the federal cabinet to quickly collect and prepare proposals on possible countermeasures. Vice Chancellor and Finance Minister Lars Klingbeil stressed the need to protect Germany's and Europe's steel, automotive, chemical and pharmaceutical industries.
