Summit: EU warns China of an intensified trade conflict

The EU China summit has disclosed the tensions between Brussels and Beijing. Despite the willingness to talk, progress in the central issue of trade did not come. Commission President Ursula von der Leyen then spoke of a crossroads. “So that the trade remains advantageous for both sides, it has to be more balanced,” she said at a press conference with EU Council President António Costa.

China and the EU, which have had diplomatic relationships for 50 years, are the second most important trading partners for each other. However, Brussels hurts the immense deficit of more than 300 billion euros last year. Because China exports a lot to Europe, but imports little from there. EU tariffs on Chinese electric cars and China’s surcharges on vineyards from Europe additionally burden the ratio.

China sees no conflicts of interest

China’s state and party leader XI Jinping said that both sides would have to act with foresight under the troubled international situation and would have to make correct strategic decisions. There is “no fundamental conflict of interest or geopolitical contradictions between China and Europe”. Both sides should remain open and handle their differences properly.

The sound from Brussels, on the other hand, rougher: In addition to unfair subsidies, the EU criticizes, among other things, growing overcapacity and market access problems for European companies. The trade relationships are “highly unbalanced,” said the press release to the summit.

The EU is ready to lead a constructive dialogue to solve the current conflicts, the State Association said. As long as this is not the case, the EU will take measures to protect its legitimate interests. From the Leyen added that there were currently 14.5 percent of the total Chinese exports to the European Union, while only 8 percent of EU exports went to China.

With a view to the aggressive customs policy of US President Donald Trump, the German called for cooperation. As two of the largest economies in the world, the European Union and China have a common responsibility to maintain and reform the global trading system, she said.

Ukraine war: Beijing should use influence

It was already clear in advance that Ukraine in Beijing will be an important topic: China’s role in the Russian war of attack against Ukraine has been employing the EU for a long time. In Beijing, Costa demanded that China use its influence on Russia to put an end to the war. “How China continues to interact with Putin’s war will be a decisive factor for our further relationships,” said von der Leyen.

In the conflict, the People’s Republic is neutral and emphasized to stand up for peace negotiations and a political solution. Shortly before the summit, Brussels also punished Chinese companies in the 18th sanction package against Russia. Beijing is firmly on Moscow’s side. According to EU officials, the Chinese deliver about 80 percent of those goods that Russia can use civil or military.

During his visit to Brussels at the end of June, China’s Foreign Minister Wang Yi caused excitement: In conversation with the EU foreign representative Kaja Kallas, according to media reports, he said that Beijing did not want Russia to lose war, otherwise the United States could focus its focus on China.

Progress in rare earths?

According to the EU’s will, China should become more reliable in the delivery of critical raw materials. At the beginning of April, China triggered seven rare earths with export controls and magnets made from them in the world. Beijing played a strong card in the customs poker at the time. In many German industrial companies, the fear of production stops was changed because the metals for electric motors and sensors are essential. China is also by far the world market leader for these raw materials.

German and European companies have been missing planning security since export controls. China’s Ministry of Commerce approves export applications, but these are complicated and lengthy. In Beijing, Von der Leyen now announced a new mediation: “We have – and that is new – agreed to have an improved export delivery mechanism,” she said without more precise details. According to her, problems with bottlenecks should be checked and solved faster and more transparently.

China emphasizes that the measures are not directed against Europe, but the Brussels sees the goal behind the tactics to use a “quasi-monopoly” as a negotiating mass and weapon to weaken competitors in key industries, as said of the Leyen at the G7 summit in Canada in mid-June.

With one voice in climate change

For China it could be the good news of the summit: After a long negotiation, both sides signed a joint climate protection declaration. Both sides confessed to do more for the climate, and the Paris climate agreement and the UN Convention on Climate framework. They called to implement their goals and principles “comprehensively, honestly and effective”. It is the “basic pillars of international climate work”.

Beijing and Brussels also agreed to present new national climate goals (NDCs) for 2035 before the UN climate conference COP30 in the Brazilian Belém. The COP30 takes place in November. A visit to EU-sentences in Beijing last week had clouded the hope of a joint explanation, as well as reports that Brussels had asked for more concessions from Beijing.

China causes the most carbon dioxide worldwide, but also expands the most renewable energy. In contrast to the issues of trade, the international security situation or human rights, the EU still sees space for cooperation with the People’s Republic in the area of the environment and climate.