Key facts
- The EU and China reached a trade deal to halve China's exports of hybrid vehicles to Europe.
- Chinese businesses view the recent trade understanding as balanced and welcome.
- A study found China's subsidies to industry are up to eight times higher than in other countries.
- Chinese businesses are eager to invest in Europe but assess market profitability.
- The EU's proposed Industrial Accelerator Act aims to steer public procurement towards European companies.
Panelists at POLITICO’s European Resilience Summit agreed that while the EU and China are in a good position for trade talks following a recent deal on hybrid cars, significant challenges persist. Linlin Liang of the China Chamber of Commerce to the EU described the agreement reached in Beijing as "quite balanced" from the Chinese perspective and "very welcome." The deal, which aims to halve China's exports of hybrid vehicles to Europe, was a key outcome for EU Trade Commissioner Maroš Šefčovič, who is seeking to reduce a daily bilateral trade deficit of €1 billion.
Both sides have committed to continued dialogue on issues including market access for medical devices and the EU's Foreign Subsidies Regulation. Liang indicated that Beijing reserves the right to retaliate if future talks deviate from agreed terms. However, Kathleen Van Brempt, a Belgian MEP, highlighted that China's aggressive subsidy policies, reportedly up to eight times higher than in other nations according to an OECD study, remain a major obstacle. Liang countered that China's export success is also due to "decades of investment in innovation" and that Chinese businesses have a strong interest in investing in Europe, provided they can assess market profitability.
The discussion also touched upon the EU's proposed Industrial Accelerator Act, with differing views between policymakers and industry. While MEPs are reportedly aligned on the bill, concerns exist about its "Made in Europe" provision potentially isolating the EU from global supply chains. Holger Weintritt of Bayer cautioned against excessive protectionism, advocating for "reliable partnerships instead of isolating ourselves."