Fighting while talking won't benefit EU

This is an editorial from China Daily.

The joint statement released after a meeting between French President Emmanuel Macron and German Chancellor Friedrich Merz on Friday shows the challenges facing China-EU economic relations.

Both leaders claimed that China's widening trade surplus with the European Union — at "1 billion euros ($1.14 billion) a day" — along with what they described as an "undervalued renminbi", poses an "existential threat" to European manufacturing. It remains to be seen what new "emergency measures" the EU will come up with to "shield" European industry from what it claims are China's "unfair trade practices".

However, a series of restrictive measures introduced by the EU targeting Chinese enterprises suggest a bumpy road ahead for the healthy development of China-EU economic ties.

On July 1, the new European "safeguard" system for steel imports came into effect, introducing lower import quotas for duty-free imports and a 50 percent tariff on imports exceeding these quotas, greatly impacting Chinese steel mills and products. On July 7, the European Commission imposed definitive "antidumping" duties of up to 45 percent on imports of passenger-car and light-lorry tires originating from China.

Additionally, the European Commission on Monday fined Chinese online retailer AliExpress 550 million euros for allegedly "failing to curb the sale of counterfeit goods" on its site, marking the heftiest penalty issued to date under the Digital Services Act. China opposes the EU's practice of erecting digital barriers under the pretext of platform regulation and adopting discriminatory measures to restrict and suppress the normal operations of Chinese e-commerce companies in Europe, said a spokesperson for China's Ministry of Commerce. The EU is urged to stop exploiting the ambiguity of legal provisions to abuse its discretionary power, and to treat Chinese enterprises fairly and impartially.

It is obvious that the EU takes increasingly protectionist measures against China. The escalating restrictions have occurred shortly after the inaugural meeting of the China-EU trade and investment consultation mechanism late last month, during which both sides agreed to remain committed to addressing economic and trade differences through dialogue and to preventing disputes from escalating into a trade war. They established four initial work streams under the mechanism to further discuss issues such as trade and investment balance, export controls and intellectual property.

It is imperative that China get prepared to deal with the EU's dual strategy of "dialogue" and "pressure" in the long run. The message from French and German leaders suggests the EU may consider a major adjustment of trade policies toward China. Despite this, both leaders emphasized that they are not seeking to "decouple" from China.

In his meeting with a cross-party European Parliament delegation in Beijing on Tuesday, Foreign Minister Wang Yi stressed that China and the EU are partners rather than rivals, and that their interests are deeply intertwined. He called for the EU to stop politicizing economic and trade issues, and to work with China for an upward and dynamic balance of trade from a long-term perspective.

These remarks keep the door open for China and the EU to maintain a constructive, cooperative and win-win relationship based on equality and reciprocity — provided that the EU is willing to meet China halfway, manage differences, broaden consensus and safeguard an open global economy.

There is a need for the two sides to make full use of the established trade and investment consultation mechanisms to bring issues to the table openly and address them with a pragmatic and rational approach. The primary objective is to prevent the European side from adopting a "nothing-to-lose" mentality, where, driven by internal political pressures, it shifts internal contradictions outward rather than resolving them constructively.

Hopefully both France and Germany can act with a rational and practical attitude, and play a constructive role in helping the EU work with China to address their concerns through dialogue.