The European Union is considering a fundamental change to its trade policy with China amid a widening trade deficit, rising dependence on strategic sectors and growing pressure from China’s state-sponsored production model on European industry.
China, the world’s largest manufacturing hub, is boosting its outreach in global markets through state-sponsored industrial policies as it rapidly expands production capacity in many fields, especially electric vehicles, batteries, solar panels, critical raw materials and high-tech products, putting pressure on Europe’s competitiveness.
European Commission President Ursula von der Leyen said at the G-7 summit in Canada that the EU’s trade with China is unsustainable.
She said the EU needs to grow its production capacity, expand its network of free trade agreements around the world and diversify supply chains, especially because critical minerals and raw materials are concentrated in China, urging the bloc to avoid heavy reliance on a single supplier.
China’s dominance in global trade will be among the topics discussed during an EU leaders’ summit in Brussels on Thursday and Friday.
