Key facts
- EU market access could be restricted to counter China's trade imbalance.
- MEP Engin Eroglu believes China's export-driven economic model is flawed.
- High youth unemployment in China could be exacerbated by EU trade measures.
- The EU's trade deficit with China reached a record €1 billion in 2026.
- The European Commission plans unilateral trade defense measures, potentially including tariffs and quotas.
German liberal MEP Engin Eroglu, who chairs the European Parliament’s delegation for relations with China, has stated that the European Union possesses significant leverage over Beijing through its market of 450 million consumers. In an interview with Euronews, Eroglu argued that China's economic model is "flawed" and that restricting access to the EU market could destabilize Beijing's export-driven economy and potentially its political stability.
Eroglu's comments come amid escalating tensions between the EU and China. The EU has set an October deadline to discuss trade imbalances, which saw the bloc's deficit with China reach a record €1 billion in 2026. With a surge of low-cost Chinese imports impacting European industries like steel, cars, and chemicals, the European Commission is considering measures to restrict market access, potentially including tariffs and quotas, before the deadline.
He highlighted that if Chinese companies face layoffs due to EU restrictions, it could lead to political problems for the Chinese government, especially given existing high youth unemployment. Eroglu pointed to China's display of technological prowess, such as humanoid robots during the Lunar New Year, as a distraction from underlying economic weaknesses. Data from Alicia Garcia Herrero of Natixis indicates that state-backed "zombie" companies accounted for over 12% of registered firms in China in 2026, more than double their share in 2018. The OECD also reported that Chinese companies receive significantly more subsidies than those in OECD member countries.
Eroglu suggested that this unsustainable model undermines China's aspirations for global dominance. He expressed hope for avoiding a trade conflict but noted the necessity of reacting to the decline of European industries. The EU's trade enforcement authority has also opened investigations into Chinese agricultural imports, such as Peking duck.