The EU and China, world’s second and third largest economies, will mark 50 years of their diplomatic relations this month. Trade is at the core of their partnership.
China is EU’s second largest trading partner (after the US). EU is China’s largest trading partner. EU-China daily trade is estimated $2.7 billion. EU imports critical minerals like rare earths – important for its cars and appliances. China imports machinery and vehicles from the US.
The Chinese foreign minister Wang Yi is visiting France and Germany and Brussels – he is seeking closer ties with EU in what he calls a “volatile world.”
Despite large trading volumes, the two sides have a disagreement on several issues. EU has a trade deficit of $300 billion. It has problems with Beijing’s close ties with Moscow on the war with Ukraine. Chinese rise as an EV superpower threatens the dominance of European car makers. Brussels imposed tariffs on EVs, much to the detriment of Beijing.
President Trump’s sweeping tariffs have presented the US as an unreliable trading partner for both Brussels and Beijing. Trump has publicly stated his disdain for Europe and the EU now finds US as an unreliable strategic ally after he told them to be more self-reliant for their security.
China is losing the US market, so it needs to keep European market. It will also have to improve access to its market for European goods.
There is deep-seated mistrust between the two sides. EU leaders have publicly stated that China is a “systematic rival” and the need to derisk, if not decouple from China. Lithuania’s stand on Taiwan and EU’s support for Lithuania did not go down well with Beijing which sees it a violation of “One China” policy.
The evolving China-EU relations will be consequential for the world and will impact businesses and supply chains across the world.
Will China and the EU be forced into reproachment because of the troubles for both sides from the US?
𝐃𝐢𝐬𝐜𝐥𝐚𝐢𝐦𝐞𝐫: The article has reference to open sources including Al Jazeera.
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