EU receives positive signals and a request from China

Relations between the European Union and China have recently become very tense - especially in trade issues. Yet the EU and the People's Republic need each other. Was the summit able to mend the relationship?

At their 24th summit in Beijing, the EU and China took another small step towards each other in the dispute over trade issues and unfair competition. According to EU Commission President Ursula von der Leyen, the government of the People's Republic was open to the problem of the negative trade deficit. "I am glad that we have agreed with President Xi that trade between the two of us should be balanced," said von der Leyen after the talks with state and party leader Xi Jinping.

The trade deficit to China's advantage has doubled in the past two years to almost 400 billion euros. For many Europeans, this is a cause for concern, said the German EU politician. On the other hand, daily trade in goods between China and the EU is worth more than two billion euros, said EU Council President Charles Michel during the talks. It is hoped that concrete measures can be implemented to bring this relationship back into balance.

The EU is China's most important trading partner. This is another reason why the second largest economy reacted nervously to Brussels' plans to become more independent in some economic sectors, such as some raw materials. In Beijing, however, von der Leyen and Michel emphasized that they did not want to decouple from China. Michel and von der Leyen remained tight-lipped about Brussels' controversial investigation into Chinese e-car subsidies. The topic had been discussed, they said. They did not wish to comment on ongoing investigations. China had sharply criticized the investigation.

The EU accuses China of using subsidies for e-car manufacturers to push down the prices of electric vehicles to such an extent that they distort competition on the EU market. Experts and representatives of the automotive industry are skeptical of Brussels' move because they fear Beijing's sanctions as a countermeasure. Von der Leyen said that the e-car subsidies were part of the problem of the trade deficit to China's advantage.

Too many goods in China

According to von der Leyen, the reasons for the deficit are the more difficult market access for EU companies in China, preferential treatment of Chinese companies there and overcapacity in China's production. Goods that cannot be sold in China end up on the international market and therefore also in Europe, where they compete with local companies. Europe likes competition, said von der Leyen. "But competition must also be fair." According to her, a list of further points, which she did not elaborate on, will be discussed at upcoming meetings. They want to see concrete results from China, she said. "This will of course determine the future of our relationship."

The EU leaders also called on Beijing to remove market barriers for European companies. Von der Leyen saw progress in the regulations for foreign companies to transfer data out of China. Beijing wants to create more clarity for data exports with a "mechanism", she said. Until now, vague standards had ensured that companies could not always be sure that they were not breaking the law.

No rivals, no confrontations

The Chinese side, on the other hand, spoke primarily of cooperation. Xi said that, in his view, China and the EU should be partners for mutually beneficial cooperation. Despite their different political and economic systems, the two sides should not regard each other as rivals and should not enter into confrontations. He was probably alluding to statements made by top EU politicians, who often describe China as a "partner, competitor, systemic rival".

There were no concrete results at the first summit in person since 2019. Michel and von der Leyen referred to future rounds of talks in which some of the problems will be discussed further. Other topics included China's role in Russia's circumvention of sanctions, the war in Ukraine and the conflict between Israel and the Islamist Hamas.