EU must heed Beijing's stern warning: China Daily editorial

China regards the European Union as a key partner willing to uphold multilateralism and free trade. However, this perspective is now facing challenges due to the European Commission's multiple unilateral restrictive policies, bills and sanctions that mainly target China.

A recent strongly-worded statement from a Chinese diplomat in Madrid cautioned that the EU's planned investment restrictions might compel China to "close its doors" to EU companies. The recent EU protectionist actions have prompted China to review its economic relations with the bloc.

Speaking in an unusually straightforward tone, Qu Xun, a diplomat at China's embassy in Spain, said that the "controls, limitations, and sanctions" introduced by the European Commission toward China in the past three months have pushed China into a corner, leaving it with no option but to close the door if it persists with its protectionism.

To a large extent, the catalyst for this blunt message was the EU's proposed Industrial Accelerator Act and the revision of its Cybersecurity Act. The IAA seeks to impose onerous restrictions on foreign investment in strategic sectors with the goal of reducing dependence on so-called "subsidized" imports from China.

Likewise, the EU's plan to revise its Cybersecurity Act also targets China by proposing to enforce strict controls on EU ownership in critical industries and limit "high-risk" cybersecurity suppliers, identified as primarily Chinese by the European Commission. These actions indicate that the EU's restrictive measures have shifted from targeting specific Chinese companies to broad legal and regulatory barriers targeting Chinese companies and investments.

In the past few months, China's Ministry of Commerce has repeatedly expressed its opposition to the EU's politicization and over-securitization of trade and economic issues and its discriminatory treatment of Chinese enterprises.

Aside from that, Beijing has been remarkably patient. It has urged settling differences through dialogue and negotiation. However, its patience is wearing thin. The rare warning of the Chinese diplomat that it will "close the door" is a signal that if the EU proceeds with this discriminatory legislation, Beijing will have no choice but to fight back.

The European Commission's approach contradicts its commitment to openness and the genuine needs of the bloc. As an open economy, the EU should offer a nondiscriminatory business environment. However, its executive arm's actions have erected barriers, which undermine this goal and will ultimately harm the EU's own interests. Weakening economic ties with the Chinese market is detrimental to the currently sluggish EU economy and the bloc's long-term competitiveness.

The EU's anxiety over its competitiveness has prompted calls for "de-risking" based on the misguided perception that China is a "rival".

But the market tells a different story. In the face of a complex geopolitical environment, European companies have embraced the "in China, for China" strategy, expanding their investments and deepening technological innovation collaborations with Chinese enterprises. This partnership has not only enhanced the global competitiveness of European and Chinese companies but also revived and upgraded European manufacturing, creating a win-win scenario for both sides.

The European Commission can continue along the protectionist path it is taking under the illusion that it can isolate the EU from Chinese competition while retaining Chinese cooperation. Or it can listen to the concerns of both China and the EU's own pragmatic member states and business community, drop the stigmatizing "high-risk" label it is pinning on Chinese enterprises and investments, and engage with China on the basis of mutual respect and nondiscrimination.

It is hoped that the EU will approach economic competition and exchanges with China in an objective and rational manner, acknowledging the necessity and significance of maintaining stable economic and trade relations.

The stern warning issued by the Chinese side should be taken seriously.