European Commission (EC) President Ursula Von der Leyen blamed China for unfair trade practices while addressing the European Parliament on 8 July 8. The remarks come as the two powers have downsized an upcoming summit in China, which was originally intended to serve as a platform for business negotiations.
“If our partnership is to move forward, we need a genuine rebalancing: fewer market distortions, less overcapacity exported from China, and fair, reciprocal access for European business in China,” Von der Leyer told members of the European Parliament in her address.
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“China invested early in many of the technologies of the future,” the commissioner said, referring to sectors China dominates in such as solar panels and electric vehicles (EVs).
“But then it started flooding global markets with cheap, subsidised goods, to wipe out competitors.”
Tensions between the EU and China have intensified as both powers consider the implications of their respective US tariff negotiations processes. China’s imposition of restrictions on rare earth minerals, prompted by its ‘tit-for-tat’ tariff escalation with the US in April, has disrupted global supply chains. The export curbs on these minerals, which are vital to the production of vehicles, have already impacted European businesses.
The trading partners have had other disputes over the past year. China recently retaliated against EU restrictions on China’s medical device makers (imposed earlier this year) by excluding EU-based companies from being eligible for public procurement contracts for certain medical products in China. It follows EU allegations that China engages in dumping practices for EVs in Europe and investigations into European cognac and pork exporters.
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By GlobalData“Goods and services that are ‘made in China’ get an automatic 20% price advantage in public bids,” Von der Leyen said.
“This is simply not fair. The system is explicitly rigged.”
The EC Presidents’ comments come weeks ahead of a summit meant to celebrate the 50th anniversary of EU-China ties. Initially planned to take place over two days, it will only take place over one day in Beijing, and President Xi Jinping is reportedly unlikely to attend. The summit is expected to be more symbolic than strategic, as uncertainty over the EU’s trade with China continues.
