China-EU trade talks rebalance, stabilize relations

Bridges over barriers

Other closely watched outcomes include an agreement on engaging in a technical dialogue on the EU's Foreign Subsidies Regulation, or FSR. In force since 2023, the FSR sparked a string of disputes involving Chinese companies' mergers and acquisitions and bids for public contracts within the bloc.

On export controls, the parties reached an understanding to give advance warning of such measures and to "improve the transparency of listing and delisting procedures". They will also support steps to delist entities in line with the respective legislation.

Heat had been building in the run-up to the Beijing talks, with the EU particularly vocal about its widening trade deficit with China, and mapping out a series of restrictive measures.

While any economy could feel alarmed by the growing gap, Roehr said Germany should, in particular, remember its own recent pride in being the "world champion" in exports.

When the US complained about the prevalence of German cars on its roads, "Germany was quick to point out that this was not the result of unfair terms of trade, but a conscious decision taken by the US consumers who liked German technology better than the more mundane domestic vehicles", he said.

In Wang's meeting with Sefcovic, the minister also stressed that China is not the "root cause" of the EU's economic and trade problems, but a partner in resolving them.

Marian Duris, a foreign policy expert and adviser at the European Parliament, said the consultation mechanism, indeed, can yield results, but the outcomes cannot "compensate" for the eroding competitiveness caused by policy choices at home.

"It would be misleading for Brussels to attribute Europe's industrial difficulties primarily and only to other actors," Duris said. "Years of high energy prices, excessive bureaucracy, fragmented capital markets, underinvestment, centralization of competences, ideological decision-making, and an increasingly burdensome regulatory environment have also weakened Europe's competitiveness. Businesses here face greater uncertainty, while competitors in other regions benefit from more favorable conditions for investment and industrial expansion.

"European policymakers who focus solely on tariffs and import restrictions thereby acknowledge their own responsibility for the decline in competitiveness and their failure to grasp modern challenges."

Schumann echoed the argument that Europe must do its own homework.

"Competition from China is real. But it should be an incentive for Europe to become better, not an excuse to close our markets," he said.

A more balanced trade tie does not need to hinge on defensive tools, as balance can also be achieved by expanding opportunities on both sides, Schumann said, hailing the consensus agreed upon at the talks on possible tariff reduction and improved market access.

"That, in my view, should be the objective: balancing upwards through more market access, more exchange and more opportunities, rather than balancing downwards through ever more restrictions," he said.