[Salon] EU trade chief Valdis Dombrovskis says bloc doesn’t intend to decouple from China



https://www.scmp.com/news/china/diplomacy/article/3235566/eu-trade-chief-valdis-dombrovskis-says-bloc-doesnt-intend-decouple-china?module=lead_hero_story&pgtype=homepage

EU trade chief Valdis Dombrovskis says bloc doesn’t intend to decouple from China | South China Morning Post

23 Sep, 2023
EU trade chief Valdis Dombrovskis speaks at the Bund Summit in Shanghai on Saturday. Photo: Reuters

European Commission trade chief Valdis Dombrovskis has told China that the bloc does not intend to decouple from the country, one of its largest trading partners.

 De-risking is not decoupling. And the EU has no intention of decoupling from China,” Dombrovskis said when addressing the Bund Summit in Shanghai on Saturday, ahead of a high-stakes dialogue with Chinese leaders including vice-premier He Lifeng next week in Beijing.

Dombrovskis vowed to step up ties with China to manage trade issues and address global crises such as climate change. But he also stressed the EU should minimise dependencies for “a select number of strategic products” and act in a proportionate and targeted way to maintain the bloc’s “open strategic autonomy”.

“We have to protect ourselves in situations when [our] openness is abused,” Dombrovskis said.

He cited trade figures that showed that the EU racked up a deficit of almost €400 billion (US$426 billion) out of a total trade volume of €865 billion last year.

Two-way trade also dropped 7.8 per cent in US dollar terms in the first eight months, according to Chinese customs authorities.

Both sides have a long list of gripes and demands as Beijing and Brussels navigate a complex geopolitical situation.

The EU has long complained about the trade deficit and a lack of fair access to the Chinese market. The bloc has also prodded Beijing to cooperate on climate change and the conflict in Ukraine.

Meanwhile, the EU’s talk of “de-risking” has caused consternation in China, with Beijing demanding clarification as Brussels appears more hawkish in aligning with Washington’s combative approach towards China.

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The EU’s latest probe into a “flood” of cheap Chinese electric vehicles (EVs) into the continent has added fresh strains to trade ties that have long been hailed as the ballast for a broader relationship.

China has condemned Brussels’ “sheer protectionism”, suggesting EVs will be front and centre on the agenda when Dombrovskis heads to Beijing. The EU says it has ample evidence that Chinese carmakers have been given state subsidies.

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The rise in geopolitical tensions “increases uncertainty for international businesses, leads to more state involvement in the economy and risks starting subsidy races,” Dombrovskis said in his speech.

The EU trade chief also said Beijing and Brussels should work to tackle global issues such as food security, climate change and debt distress.

He Weiwen, a senior fellow with the Chinese think tank Centre for China and Globalisation, said Dombrovskis’s talk with He Lifeng would be vital to defuse trade tensions and stabilise ties.

“Such top-level talks between the EU and China will lay down some prerequisites to insulate trade from politics. Equal negotiations can pave the way for the future of Chinese EVs in the EU, and I’m optimistic as the auto sector is the core of bilateral trade,” said He, who is also a former economic and commercial counsellor at the Chinese consulates in New York and San Francisco.

“This year’s trade figures are not that rosy,” said Sun Yongfu, a senior fellow at CCG and former head of European affairs at the Chinese Ministry of Commerce.

“So we are changing the so-called unfair trade. On the contrary, the leaders of the EU announced an anti-subsidy investigation into Chinese EVs. I don’t think this is a very healthy signal for the high-level economic and trade dialogue,” said Sun, who has been involved in coordinating trade talks between senior Chinese and EU leaders.

Sun said although the EU said it did not intend to decouple from China, de-risking would still hurt cooperation between Beijing and Brussels.



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