Europe Desperately On Its Knees For China's Help, Admits It Can't Abandon China

Europe Desperately On Its Knees For China's Help, Admits It Can't Abandon China

#europe #economy #market

The European Union isn't looking to break up with China, but it's taking steps to protect itself. That's the word from Valdis Dombrovskis, the EU's executive vice president. The EU and China have been experiencing some tension lately, mainly due to China's close ties with Russia, especially after Russia's unexpected visit to Ukraine.

Dombrovskis made these comments during a speech at the Bund Summit conference in Shanghai. He pointed out that while the EU had a record year of trade with China, the scales were tilted. The EU is in the red by almost €400 billion. That is a staggering $426.08 billion.

Dombrovskis, who also wears the hat of the EU's trade commissioner, is in China for four days to work on achieving a more balanced economic relationship.This visit comes right after the European Commission announced an investigation into whether it should slap tariffs on Chinese electric vehicles, claiming they benefit from state support and hurt European producers.

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Dombrovskis stressed the EU's commitment to a fair and open market among its members. He also emphasized the need for the EU to protect itself, especially in times of urgency. But here's the deal. The EU isn't looking to cut ties with China entirely.

They want to play it safe and minimize their reliance on a few critical products. Think of it as a financial safety net. The EU pins part of its €400 billion trade deficit on China's restrictions on European companies.

EU Ambassador to China, Jorge Toledo, even called out a "thousand" obstacles to market access. That's like hitting a thousand red lights on the road to trade. Next up on the agenda is an economic and trade dialogue between Dombrovskis and Chinese Vice Premier He Lifeng. This is the tenth time they've met since 2008, and it's seen as a big test for both sides.

In his speech, Dombrovskis also mentioned that China faces some economic challenges, but he urged China to make it easier for foreign businesses and maintain a stable business environment for fair trade.

He even threw in a request for China to take a stance against Russia's "weaponizing food" strategy and to help revive the Black Sea Grain Initiative, which ran out of steam in July when Moscow decided to step back. The EU sees China as an important partner. They're not breaking up. They're just working on a more balanced trade and investment relationship.

On the other hand, European Commission President Ursula von der Leyen took a firm stand when she announced the investigation on September 13, condemning unfair practices that harm European competitors.

However, this move triggered a sharp response from China, which warned that the investigation would damage trade relations and accused the EU of "naked protectionism," raising concerns about a potential trade war.

As EU Trade Commissioner Valdis Dombrovskis embarks on a four-day visit to Shanghai, Suzhou, and Beijing, these tensions are likely to persist. Dombrovskis has been trying to ease Beijing's concerns, emphasizing that Europe aims to "maintain open dialogue" with China.

The European Union is currently crossing a complex and delicate balancing act in its complex relationship with China. This complicated dance has led the EU to categorize China in various roles, including as a partner in global affairs, an economic rival, and a systemic competitor.

On one hand, the EU recognizes China's pivotal role as a partner in addressing pressing global challenges, with climate change standing prominently among them. Both the EU and China have acknowledged the urgency of combating climate change, and they often collaborate on initiatives aimed at reducing carbon emissions and promoting sustainable practices.

Their joint commitment to the Paris Agreement reflects this shared responsibility to protect our planet's future. However, on the other hand, the Union is acutely aware of the need to diversify its economic ties and reduce its dependency on China. This stems from hard-learned lessons of past overreliance, particularly when it comes to energy resources.

The Union vividly remembers the period when it heavily depended on Russia for fossil fuels, a scenario that left it vulnerable to external pressures and disruptions in supply.As a result, the EU is actively working on strategies to reduce its economic interdependence with China in certain critical sectors. This involves exploring alternative sources and supply chains to ensure a more resilient and diversified economic landscape.
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