The trade relationship between the European Union (EU) and China is now on the brink of crisis, as European Commission President Ursula von der Leyen warned that trade between the two sides needs to be more balanced to remain mutually beneficial. At the 25th EU-China Summit in Beijing, she stressed that competition must be fair and criticized China’s subsidized overcapacity that is disrupting European markets. Von der Leyen also raised the issue of rare earth export controls and market access as key obstacles that need to be resolved urgently.
Meanwhile, Chinese President Xi Jinping has voiced his desire to strengthen bilateral ties and described the China-EU relationship as “mutually beneficial”. However, China’s actions to limit exports of key raw materials and introduce restrictions on medical products from Europe have sparked major concerns in Brussels. While Xi has called for increased communication and mutual trust, Beijing’s actions are seen as contradicting its friendly rhetoric.
The trade tensions have been further complicated by the EU’s imposition of tariffs on electric vehicles from China to protect its local industry, prompting China to launch counter-investigations on European products. China's trade surplus with the EU, which reached almost US$143 billion in the first six months of this year, increased by 21% compared to the previous year, adding to the pressure on the relationship. The EU has urged China to take concrete steps to correct the imbalance.
The rift in relations has also been influenced by geopolitical issues, especially China's stance on the Ukraine conflict. The EU wants Beijing to play a more active role in ending the war, while China is more interested in lifting trade sanctions imposed by the EU. Von der Leyen recently accused China of contributing to Russia's war economy, a statement that has added fuel to the already tense situation.
The summit, which was supposed to last two days in Brussels, was cut to one day and moved to Beijing, a clear sign that trust between the two sides is becoming fragile. Analysts have described the move as evidence that the EU and China's stances are becoming increasingly hard and difficult to reconcile. Despite the sweet diplomatic words, it is clear that the EU and China are now on a thorny path in global trade and geopolitical relations.