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EU commerce commissioner Valdis Dombrovskis will arrive in China on Friday with a blunt message: purchase extra of our items.
Dombrovskis is predicted to convey an extended record of business grievances in addition to concern a couple of commerce deficit that has ballooned to nearly €400bn — which EU ambassador Jorge Toledo known as “the highest in the history of mankind” at a panel dialogue on Thursday — and a risk of tariffs on Chinese language electrical automobiles.
The EU commissioner will spend 5 days in China, the place he’ll tackle a enterprise discussion board in Shanghai and maintain talks with senior officers in Beijing which can be anticipated to be essentially the most intensive in months.
The size of his journey “suggests each side need to make sure that some channels stay open after one of the vital adversarial episodes within the EU-China relationship”, mentioned Hosuk Lee-Makiyama, director of the European Centre for Worldwide Political Financial system, who identified that Dombrovskis would meet vice-premier He Lifeng, his rating equal, slightly than a extra junior minister.
Amongst European companies’ longstanding complaints are China’s refusal to approve medical units and settle for some meals merchandise from the bloc. Dombrovskis can also be apprehensive that Beijing is utilizing safety measures to crush competitors and can query a brand new knowledge regulation that requires corporations to retailer knowledge regionally.
A report released this week by the EU Chamber of Commerce in China included greater than 1,000 suggestions to beat what Toledo known as “market limitations”.
Europe and China wanted to “sit down and have a grown up dialog about what’s the common-sensical method to de-risking”, mentioned Jens Eskelund, president of the chamber.
China, in flip, will problem the EU’s new carbon border tax and the announcement final week of an investigation into subsidies for electrical automobiles, which may end in tariffs of 10-15 per cent. Brussels argues that its automobile trade is being harmed by artificially cheaper imports.
The EU’s latest determination to restrict silicon chip know-how exports has additionally stoked tensions.
“The idea of nationwide safety has been overstretched,” mentioned Wu Hongbo, Beijing’s particular consultant on European affairs.
Brussels has been cautious to strike a softer stance than the US, which is pursuing a extra sweeping decoupling with China. Toledo emphasised on Thursday that Europe’s deal with de-risking — slightly than decoupling — was pushed by the coronavirus pandemic and the struggle in Ukraine, which disrupted the manufacturing and power sectors.
China’s latest export controls on germanium and gallium, metals crucial to chipmaking, “shocked” European companies and underscored the necessity to re-examine provide chains, Toledo mentioned.
China would favor to maintain enterprise as typical — together with its tactic of dividing the 27 member states, which have totally different ranges of dependence on its economic system, mentioned analysts.
However the bloc’s stance had hardened, based on former EU commerce commissioner Karel De Gucht, who held the publish from 2010 to 2014. “What has modified is that the fee realises that we’re actually dealing with a strategic problem.”
Toledo mentioned the struggle in Ukraine was additionally “tainting” relations, with Europe wanting China to make use of its leverage to press Russia to withdraw its forces. “We’re speaking to our Chinese language associates to make them perceive that this for Europe, for the European Union, is existential,” he mentioned.
China’s Wu countered that Beijing supported peace in Ukraine, however Moscow and Kyiv weren’t prepared for negotiations. He additionally accused the west of making use of a double customary to the battle, citing the struggle in Iraq.
“Will we overlook the depressing lifetime of the Iraqi folks, once they have been invaded by a everlasting member of the Safety Council with out the approval of United Nations authority?” he mentioned.
Each side pointed to areas equivalent to digitalisation, synthetic intelligence and the inexperienced transition as areas for co-operation.
Solar Yongfu, former director-general of the Europe division in China’s commerce ministry, mentioned Europe was overdoing discuss of systemic rivalry. “De-risk doesn’t imply de-cooperating,” he mentioned. “We have to discover additional methods and extra areas of co-operation.”
He argued that the anti-subsidy probe had divided Europe, with some German teams opposed, together with carmaker Mercedes-Benz. “I personally don’t suppose it’s a very wholesome sign.”
De Gucht concurred: “Germany actually has second ideas about this. And I’m fairly positive that because the case evolves, these second ideas will come to the floor.”