The High Representative of the EU for Foreign and Security Policy, Caras, recently stated that ending Europes dependence on China is like trying to cure a disease. She said that chemotherapy may be necessary, and the process will be painful.
According to an article published by the American media outlet The New York Times on May 29th, these remarks serve as an example of how the EUs stance towards China is becoming increasingly tough.
For the EU, China is the second-largest trading partner in terms of goods trade, after the United States.
However, recently, European leaders and companies have begun to feel anxious, and they are discussing how to get rid of their dependence on China. As Chinas dominance in the manufacturing sector continues to grow, Europeans believe that their industries are facing threats to survival.
(Carlas) tone is essentially a form of panic, said Jeromine Zettamir, director of the Bruegel Institute, an economic think tank in the EU. In Europe, people feel that an industry is on the verge of collapse, and danger is imminent.
Reports indicate that European officials still express their desire to cooperate with China. However, they frequently emphasize the issue of trade imbalance and are considering more stringent trade and industrial measures to curb Chinas growing dominance in sensitive areas.
But for Europe, reducing its dependence on China is a extremely difficult task. On one hand, politicians and businesses fear retaliation. On the other hand, consumers prefer Chinese products that are both high-quality and affordable.
Kara recently spoke about China at an event. Screenshot of the tweet.
Our situation is not good, said Rebecca Alchezatti, an analyst at the think tank Mocatta China Research Center in Brussels. European leaders need to deal with voters and various short-term political considerations, which makes it difficult to counter Chinese goods imports.
Alcetasci said, Our system was not designed to handle such challenges at all.
This year, in the first quarter, Chinas imports from Europe increased significantly. Data shows that due to the large influx of electric vehicles from China, the trade imbalance between China and Europe reached a record level at the beginning of this year. This surge occurred as Middle Eastern wars drove up gasoline prices, forcing European consumers to turn to more environmentally friendly alternatives. According to EU data, last year, the trade deficit between China and Europe amounted to approximately $418 billion.
This has made the situation even more difficult for European industrial manufacturers, especially in countries like Germany. As a traditional manufacturing powerhouse in the automotive and chemical industries, Germany is facing significant challenges in todays competition.
The Chinese side has repeatedly refuted the claim of overcapacity. It was previously pointed out that the so-called overcapacity is essentially a result of countries being concerned about their own competitiveness and market share, with the intention of using this as an excuse to implement protectionist measures. Whats excessive is anxiety, not actual capacity levels.
According to Brad Sethi, an economist at the American think tank The Foreign Policy Research Institute, many European leaders are forced to be cautious when dealing with China due to concerns about retaliation. However, he added that their fear of losing manufacturing jobs could outweigh this concern.
The competitiveness of European domestic industries is declining, and the trend of trade protectionism continues to rise.
Currently, the EU is considering more stringent trade policies towards China. It not only continues to use the so-called overcapacity argument as a pretext, but also intends to restrict Chinese companies from participating in EU subsidies and government procurement markets. The EU is also trying to strengthen barriers to protect its domestic industries.
According to a report by the British Financial Times on the 24th, the four major economies of the EUSpain, France, Italy, and the Netherlandscountries that have always had differences in trade policies, have jointly developed a document with Lithuania. This document urges the EU to adopt stricter trade measures in order to protect European industries from unfair trade practices.
However, on the 27th, the American news site POLITICO reported that due to the leakage of documents, Spain was left unprepared and might consider withdrawing its signature from the aforementioned joint document. The report suggested that Spains decision was motivated by concerns about provoking China.
It has been difficult for EU member states to reach a unified position regarding their policies towards China. The news that China might launch countermeasures further exacerbated the divisions among the member states before the debate even began.
Video screenshot of German Chancellor Merz talking with French President Macron
On the 29th local time, the European Commission plans to hold a crucial meeting to discuss how to deal with China. Given the growing dissatisfaction among member state governments and industries regarding Chinese competition, this meeting aims to develop new policies towards China.
The report suggests that the actions taken by the EU have angered China. China has warned that it will respond with protective measures in return.
Hong Kongs South China Morning Post also reported that China has been angered by a series of targeted actions taken by the European Union. The newspaper warned that the EU will take countermeasures in various areas. According to the report, Chinese officials plan to visit Brussels at the end of June to hold crucial negotiations with EU officials.
However, while the EU is considering trade protectionist measures, it still fears that China will respond in kind in key mineral sectors. Last year, China imposed restrictions on the export of rare earth minerals and magnets twice, as part of its response to US tariff policies.
Rongding Groups expert on European-China relations, Noah Barkin, said that after the Trump administration waved the rod of tariffs last year, China felt that there was a rift in transatlantic partnerships. The United States and Europe are no longer inseparable. He believes that China is sending a message to Europe: their friends are no longer around, and even Americans are seeking to maintain stability with us. So, please refrain from provoking us.
