EU Trade Chief Urges China to Reduce Perception of Risk in Economic Ties
BEIJING, Sept 25 (Reuters) – The European Union (EU) has expressed its desire to maintain ties with China despite efforts to reduce economic dependencies and risks. The EU’s Trade Commissioner, Valdis Dombrovskis, emphasized that China could play a significant role in reducing the perception of risk in their economic relationship.
The EU has long been concerned about the lack of a level playing field and the politicization of the business environment in China. These concerns grew even stronger after Beijing strengthened its ties with Moscow amid the ongoing conflict in Ukraine.
While Europe’s economic ties with China are substantial, Dombrovskis highlighted that “China could do a lot to help reduce our perception of risk.” He made this statement during a speech at Tsinghua University in Beijing.
One of the challenges that foreign companies face in China is the ambiguity in the country’s laws. China recently introduced new laws, including a foreign relations law and an anti-espionage law, which raised compliance risks for foreign companies. Dombrovskis argued that the ambiguity in these laws allows for varying interpretations, making it difficult for European companies to understand their compliance obligations. This lack of clarity decreases business confidence and discourages new investments in China.
Dombrovskis is expected to discuss these concerns with Chinese Vice Premier He Lifeng at a high-level economic and trade dialogue in Beijing on Monday. The EU also intends to address its dissatisfaction with trade imbalances, as the trade deficit with China has widened.
Simultaneously, China will press Dombrovskis to explain the EU’s de-risking strategy. Dombrovskis emphasized that the EU’s strategy is not protectionist and is not specific to any country.
As part of its de-risking strategy, the EU is evaluating its dependence on China for raw materials and components, as well as examining the factors that drive the competitiveness of Chinese products in the European market. The European Commission recently announced an investigation into the possibility of imposing tariffs on Chinese electric vehicle imports, citing concerns about state subsidies.
The EU has emphasized that it welcomes competition but insists it must be fair. However, China has criticized this probe as protectionist. The Chinese Nationalist tabloid, Global Times, argued in an editorial that the EU’s de-risking strategy should not be used as a pretext for trade protectionism.
The EU has repeatedly reassured China that de-risking does not mean decoupling. However, China strongly opposes using trade protectionism to achieve de-risking.
In conclusion, the EU intends to maintain ties with China but expects China to address the concerns regarding a lack of a level playing field and the politicization of the business environment. Both sides will engage in discussions to find ways to reduce risks and ensure fair competition.
Reporting by Ryan Woo, Bernard Orr and Yew Lun Tian; Editing by Himani Sarkar and Jacqueline Wong