Leaders of China and the EU agree on the need for “balanced” trade relations

BEIJING, Dec 7 (Reuters) – China and the European Union agreed on Thursday that their trade relationship should be more balanced at their first in-person summit in four years, but showed no signs of resolving their differences on a range of issues.

Pressing Beijing over the EU’s large trade deficit with China, EU leaders said Europe would not tolerate “unfair competition” from China, and Beijing warned the EU to expect caution from Brussels in introducing trade policies. “restrictive.”

There was also no sign that the EU had made any progress in persuading China to use more of its influence over Russia to end the Ukraine war – a source of tension in EU-China relations – and to help prevent Moscow evades sanctions for the war.

China and the EU have a shared interest in a stable and constructive relationship based on respect for the rules-based international order, European Council President Charles Michel said at a press conference after the EU delegation met with Chinese President Xi Jinping and Premier Li Qiang.

“We need to make our trade and economic relationship more reciprocal and balanced,” Michel said, adding that the bloc hopes China will take more concrete steps to increase market access for foreign companies.

European Council President Ursula von der Leyen said the parties discussed the root causes of their trade imbalance, from lack of access to the Chinese market and preferential treatment of Chinese companies, to overcapacity in Chinese production. .

“Politically, European leaders will not be able to tolerate our industrial base being undermined by unfair competition,” he said.

The EU says its trade deficit of almost 400 billion euros ($431.7 billion) with China reflects restrictions on EU companies operating there.

Several EU commissioners have visited Beijing since China lifted pandemic border restrictions this year, including trade and climate chiefs. The main irritants in the relationship remain, but there has been limited progress on technical issues.

Von der Leyen said the leaders had discussed medical devices, cosmetics and geographical indicators for food products in terms of correcting trade imbalances.

There was “progress” in China’s willingness to clarify restrictions on cross-border data flows that have hit EU companies operating in the world’s second-largest economy, he said.

But in a blow to EU-China relations, member state Italy officially informed China “in recent days” that it will abandon the Belt and Road Initiative championed by Xi, Italian government sources told Reuters on Wednesday.

“CONFRONTATION”

Xi said China and Europe should not see each other as rivals or “engage in confrontation” because of their different political systems.

China is willing to make the 27-nation EU a key economic and trade partner and cooperate in science and technology, including artificial intelligence, Xi said.

In talks held at Beijing’s Diaoyutai State Guest House, he urged the EU to “eliminate all types of interference” in the bilateral relationship, state broadcaster CCTV reported.

Xi said both sides need to develop “a correct perception” of each other and foster mutual understanding and trust.

Li said in a separate meeting that China opposes the “extensive politicization and securitization” of economic and trade issues in violation of the basic norms of market economies, CCTV said.

“We hope the EU will be prudent in introducing restrictive economic and trade policies and using corrective trade measures to keep its trade and investment markets open,” Li said.

A big goal of the EU visit was to urge Xi to stop private Chinese companies from exporting dual-use items made in Europe to Russia for its military campaign in Ukraine.

Michel urged China to “constructively engage” in kyiv’s peace overtures, but EU officials gave no sign of movement on the issue of Chinese private re-exports to Russia.

China has rejected an EU anti-subsidy investigation into Chinese electric vehicles and the EU’s “de-risking” policy to reduce its dependence on Chinese imports, particularly of critical raw materials.

He Yadong, a spokesman for China’s Ministry of Commerce, said China believed the investigation “seriously disrupts and distorts the global automotive industry chain… and will have a negative impact on economic and trade relations between China and the EU.”

Noah Barkin, a visiting fellow at the German Marshall Fund, said the summit was largely about “managing differences and avoiding a slide into confrontation.”

“The EU side achieved its main objective, which was to convey the seriousness of its concerns about the imbalances in the trade relationship and China’s support for Russia,” he said. “But it would be a mistake to expect from Xi Jinping the fundamental economic and political changes that the EU seeks.”

Our standards: the Thomson Reuters Trust Principles.

Laurie Chen is a China correspondent in Reuters’ Beijing bureau covering politics and general news. Before joining Reuters, she reported on China for six years at Agence France-Presse and the South China Morning Post in Hong Kong. She speaks fluent Mandarin.