(MENAFN) European Commission President Ursula von der Leyen has set the stage for a critical dialogue with Chinese President Xi Jinping, highlighting concerns over what she perceives as policies exacerbating the risk of de-industrialization within the European Union. As President Xi embarked on his first European tour since 2019, von der Leyen signaled her intention to address pressing issues of trade imbalances during their scheduled talks. Central to her concerns is what she describes as China's burgeoning manufacturing capacity, fueled by substantial subsidies, outpacing its domestic demand and resulting in an oversupply of goods, including electric vehicles (EVs) and steel, flooding global markets.
In her remarks, von der Leyen underscored the detrimental impact of what she termed as "unfair trade practices" on the European industrial landscape, warning against the potential ramifications of unchecked market distortions emanating from China. The backdrop of these discussions has been marked by recent actions taken by European Union authorities, including the initiation of investigations into alleged unfair practices by Chinese entities. These investigations encompass a spectrum of industries, ranging from medical devices to renewable energy, reflecting a growing sentiment of unease within the European Union regarding perceived imbalances in trade relations with China.
Against this backdrop, the tit-for-tat escalation between the European Union and China has gained momentum, with both sides resorting to reciprocal measures in what appears to be a standoff over protectionist policies. While the European Union probes into alleged Chinese subsidies and trade restrictions, China has retaliated with its own anti-dumping investigation targeting European exports, notably French brandy. This mounting tension underscores the complexities of European Union-China trade relations, characterized by a delicate balance between cooperation and confrontation.
Von der Leyen's advocacy for "de-risking" trade with China underscores the imperative for recalibrating the existing economic framework to mitigate the adverse effects of asymmetrical trade practices. However, her stance falls short of advocating for outright decoupling from China's economic sphere, reflecting the nuanced approach adopted by European Union policymakers in navigating the complexities of the European Union-China relationship.
As the dialogue between European Union and Chinese leaders unfolds, the outcome of their deliberations will likely shape the trajectory of bilateral trade relations, with far-reaching implications for global commerce. The challenge ahead lies in finding a mutually beneficial framework that addresses concerns of market distortions while fostering sustainable economic cooperation between the two economic powerhouses.
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