China Aims to Strengthen Trade Ties with Europe Amid Tensions – Economist

China plans to deepen its trade relationship with Europe, viewing the continent as a key market despite recent tensions, according to Chim Lee, Senior China Analyst at the Economist Intelligence Unit. Lee shared this during a global virtual briefing on Friday, following updates on China-EU trade negotiations.

Lee explained that China remains committed to expanding its market share in Europe, even after the European Commission imposed anti-subsidy tariffs on Chinese electric vehicles (EVs). In response, China’s Ministry of Commerce has filed a complaint with the World Trade Organization (WTO), challenging the tariffs as a breach of trade rules.

While tensions persist, Lee noted that both sides are pursuing ongoing dialogue, with the EU recently sending a technical team to Beijing. He highlighted recent diplomatic visits, including Italian President Sergio Mattarella’s trip to China following French Minister Delegate Sophie Primas, aimed at easing trade frictions.

“Though the EU is currently investigating over 30 Chinese products, including EVs, China has chosen a targeted response,” Lee said. “China has initiated probes into EU imports of brandy, dairy, and pork, imposing preliminary measures where necessary.”

Lee also noted that Chinese companies are not only seeking to establish production in Europe but are also exploring new markets in Latin America and Southeast Asia. China, holding a 60% share in the global EV market, is focused on localized production and re-industrialization efforts in Europe.

Despite challenges, China and the EU have shown a mutual interest in resolving trade issues through consultation, with Europe accounting for over 41% of China’s battery EV exports in 2023. Chinese firms, Lee said, view Europe as an essential market and are seeking partnerships with European companies to expand production locally, marking a strategic shift in response to European trade policies.