China and EU leaders agree on need of ‘balanced’ trade ties

BEIJING: China and the European Union agreed their trade relationship should be more balanced at their first in-person summit for four years on Thursday, but gave no sign of resolving differences on a range of issues.

Pressing Beijing over the EU’s big trade deficit with China, EU leaders said Europe would not tolerate “unfair competition” from China, and Beijing warned the EU that it expected prudence from Brussels when introducing “restrictive” trade policies.

There was also no sign that the EU had made any progress in persuading China to use its influence on Russia more to end the Ukraine war - a source of tension in EU-China ties - and to help stop Moscow getting around sanctions over the war.

China and the EU have a shared interest in a stable and constructive relationship based on respect for the international rule-based order, European Council President Charles Michel told a press conference after the EU delegation met Chinese President Xi Jinping and Premier Li Qiang.

“We need to make our trade and economic relationship more reciprocal and balanced,” Michel said, adding that the bloc expects China to take more concrete actions to increase market access for foreign companies.

European Council President Ursula von der Leyen said the sides discussed root causes of their trade imbalance, from a lack of access to the Chinese market and preferential treatment to Chinese firms, to overcapacities in Chinese production. “Politically, European leaders will not be able to tolerate that our industrial base is undermined by unfair competition,” she said.

The EU says its nearly 400-billion-euro ($431.7-billion) trade deficit with China reflects restrictions on EU businesses operating there.

A number of EU commissioners have visited Beijing since China lifted pandemic border restrictions this year, including the trade and climate chiefs. Core irritants in the relationship remain but there has been limited progress on technical issues.

Von der Leyen said the leaders had discussed medical devices, cosmetics and geographical indicators for food products in terms of redressing trade imbalances.

There was “progress” on China’s willingness to clarify restrictions on cross-border data flows that have impacted EU firms operating in the world’s second-largest economy, she said.

But, in a blow to EU-China relations, member state Italy informed China officially “in recent days” that it is leaving the Belt and Road Initiative championed by Xi, Italian government sources told Reuters on Wednesday.