China EU Photo:VCG

The Chinese Embassy in the UK on Wednesday rejected fresh EU allegations that Beijing's industrial subsidies and "excess capacity" are distorting global markets and widening the EU-China trade deficit, urging the EU to avoid the approach of politicizing economic issues and overstretching security concepts in normal business cooperation.

For some time, the EU has accused China of economic and trade policies, saying that China's unfair industrial subsidies, "overcapacity" have endangered European industries, and insufficient market openness led to an increase in Europe's trade deficit with China. Commenting on this, a spokesperson for the Chinese Embassy in the UK urged Brussels to adopt "a more comprehensive, objective and positive" perspective on China-EU economic ties—one that prioritizes cooperation over complaints and dialogue over dramatization. 

"Both sides need to pursue two-way market openness and resolve trade frictions through consultation, and avoid politicizing economic issues and overstretching security concepts in normal business cooperation," according to a statement seen in the embassy's official WeChat account on Thursday.

"China and the EU are major economic partners, so occasional differences and frictions are only natural. As the two sides mark the 50th anniversary of diplomatic ties, cooperation has grown from nothing to significant scale: today, our daily trade equals the annual trade volume at the beginning of diplomatic relations," the statement noted.

The China-Europe trade landscape is shaped by a confluence of macroeconomic forces, global trading conditions, and each side's industrial structure — an outcome that cannot be blamed on any single party, said the embassy, while stressing the importance to respect market economy rules and fair competition.

China is willing to expand imports of marketable and high-quality products from Europe and urges Brussels to ease curbs on high-tech exports. The EU's public procurement market is far from being as fair and open as it claims. In fact, there are many hidden barriers. Many countries have also publicly criticized the EU for favoring European companies in large procurement projects, according to the statement.

The embassy argued that China's subsidy schemes are "fully WTO-compliant and transparent," while noting the EU itself plans more than 1.44 trillion euro ($1.69 trillion) in state aid from 2021-2030, of which over 300 billion euro has already been disbursed. So, from this aspect, subsidies are not unique to China, and the EU should not adopt double standards on such issues.

"To assess overcapacity, production and export volumes alone are insufficient criteria, otherwise would Europe's Airbus aircraft and Germany's cars also have to be branded overcapacity?" the embassy asked.

This year marks the 50th anniversary of the establishment of diplomatic relations between China and the EU, and is an important year for the relationship between the two sides to build on the past and forge ahead, according to the statement. We hope that the EU will develop a more balanced and realistic understanding of China and pursue a more positive and pragmatic policy toward China. 

"What needs to be rebalanced at the moment is the EU's mentality, not the China-EU economic and trade relations," the embassy stated, adding that in the current turbulent situation, we hope that the EU will work with China to strengthen mutually beneficial cooperation, properly handle differences and frictions, and promote the continued healthy and stable development of China-EU relations.

Global Times