China-EU vehicle trade deal benefits both

The consensus reached by China and the European Union on trade in hybrid and electric vehicles effectively safeguards the interests of Chinese companies and prevents bilateral trade frictions from escalating, the Ministry of Commerce said on Monday.

Responding to a media query about discussions on trade in hybrid and electric vehicles during last week's second meeting of the China-EU trade and investment consultation mechanism in Beijing, a ministry spokesperson said that both sides held intensive consultations based on mutual respect and equality to address trade differences and each other's concerns.

The progress made with regard to trade in hybrid and electric vehicles will help create a stable, predictable and sustainable trade and investment environment, and support the steady, balanced and healthy development of China-EU economic and trade relations, the spokesperson said in an online statement.

Regarding hybrid vehicles, China and the EU had agreed on three fundamental principles — respect for market realities, nondiscrimination, and compliance with World Trade Organization rules, the spokesperson added.

According to Eurostat, the EU's statistical office, the grouping's imports of hybrid vehicles from China climbed from 107,000 units in 2024 to 302,000 units in 2025. Building on the 2025 level, China and the EU reached an arrangement for upward adjustment to ensure export capacity and stable growth for Chinese automakers, while addressing the legitimate concerns of industries on both sides.

The two sides agreed that Chinese products and companies would not face discriminatory treatment, and that quotas allocated to China would be no less favorable than those granted to any other source of EU imports, according to the Commerce Ministry.

The two sides also confirmed that the trade arrangement must comply with WTO rules, with China retaining all its rights, including the right to seek dispute settlement and trade compensation, the spokesperson said.

On electric vehicles, the spokesperson noted that the two sides achieved a "soft landing" in the countervailing duty case in January, when the EU issued general guidance on price undertakings. The EU will continue to advance procedures for price undertakings by individual automakers, as well as other review procedures related to the case.

Tian Dewen, a researcher of international relations at the Chinese Academy of Social Sciences in Beijing, said the latest consensus marks a further step toward a more institutionalized approach to resolving China-EU automotive trade disputes.

Yan Shaohua, deputy director of Fudan University's Center for China-Europe Relations in Shanghai, said that by addressing trade differences through consultation, China and the EU can provide Chinese automakers in Europe with greater regulatory clarity and reduce market uncertainty.

Haley Chen, general manager of the Southwest China Chapter of the European Union Chamber of Commerce in China, said the continued dialogue and follow-up engagement between China and the EU will remain essential to strengthening bilateral economic and trade cooperation.

Speaking at a news conference in Beijing on Monday ahead of next week's 19th Europe-China Business and Technology Cooperation Fair in Chengdu, Sichuan province, Chen said that there remains considerable potential for mutually beneficial cooperation.

"European companies bring expertise in advanced technologies, engineering, precision manufacturing, quality management and sustainable solutions," she said. "China offers a large market, strong industrial capabilities, extensive supply chains and a rapidly developing innovation ecosystem."