Europe-China trade relations at a critical juncture

Beijing – ‘Due to its ambiguous policy, China’s relations with the European Union (EU) have reached a critical stage. From here on, these relationships will either develop or end. If China continues its ambiguous trade policy, it will cause losses to both sides,’ EU trade chief Valdis Dombrovskis warned. He also recalled that the EU had launched an investigation into China’s electronic vehicles business earlier this month. However, China’s Vice Premier, He Lifeng, has still denied the allegations. At the same time, Vice Prime Minister Lifeng has warned that the EU should make a very careful decision regarding China.

Moreover, the EU and member states are heavily dependent on Chinese products. The European Union imports electric machinery, parts, boilers required in nuclear plants, organic chemicals, plastics and many other products from China. However, the EU alleges that China’s trade policy and the tax system imposed on it are ambiguous and cause harm. In 2021, the trade deficit between the European Union and China was $208.4 billion. However, last year, the deficit reached $276.6 billion.

Besides, the European Union had criticised China, which exports huge quantities to Europe, for not opening its market to the EU. In early September, the Union had expressed apprehension about the business of electric vehicles imported from China and had ordered an investigation into it. For this reason, the rift in the trade relations between the EU and China seemed to be increasing. EU Trade Commissioner Valdis Dombrovskis, who visited China on Monday, expressed displeasure over the issue. At the same time, Dombrovskis said this is the only opportunity in the hands of China to improve trade relations with the European Union.

However, China’s Vice Premier He Lifeng rejected the allegations of the European Union. On the contrary, Lifeng had criticised the Union’s trade policy for not being clear and open. Lifeng demanded the EU free and open its markets before accusing China. At the same time, the European Union, which is doing business with China, said that following China’s trade rules is very important. Nonetheless, Lifeng boldly stated that China cannot be held responsible.

Meanwhile, in recent weeks, Germany announced reducing its dependence on China. Simultaneously, Italy had withdrawn from China’s ambitious projects like the Belt and Road initiative. Eventually, the European Union indicated adopting a strict policy towards China. However, Dombrovskis’ visit to China seems to have failed.