Two weeks before the EU-China summit, European Commission President von der Leyen called on Beijing to address trade imbalances. The summit, originally scheduled to take place in Beijing at the end of July, has been shortened from two days to one.
Von der Leyen spoke on Tuesday (July 8) at the European Parliament in Strasbourg, stating, “To advance the EU-China partnership, genuine rebalancing is needed, including reducing market distortions, addressing China’s export problem of overcapacity, and providing fair and reciprocal market access for European businesses in China.”
Beijing’s export controls on rare-earth magnets have severely impacted EU industries, exacerbating the increasingly imbalanced trade relationship. In 2024, the EU-China trade deficit reached 300 billion euros. With the United States imposing high tariffs on Chinese goods, calls within the EU for tariff barriers and preventing Chinese products from stifling European industry are growing louder.
Due to the unfair subsidies provided by the Chinese Communist Party to electric vehicle manufacturers in China, tariffs have been imposed by all 27 EU member countries on Chinese electric cars. In early 2025, the EU also excluded Chinese companies from public contracts for medical devices, leading to retaliatory measures from Beijing.
Von der Leyen emphasized, “China cannot rely on exports to solve domestic economic challenges. Overcapacity must be addressed at its source – it cannot simply be shifted to the global market. This is the clear message behind our investigation into electric cars.”
She stated that Beijing initially invested in future technologies and then flooded the global market with cheap goods through substantial subsidies to suppress foreign competitors.
“From solar panels to mineral processing, all these Western industries have shut down, with China occupying a dominant position,” the President of the European Commission cited as an example.
Furthermore, due to Beijing’s “Buy Chinese” policy, European products face systematic discrimination in public procurement in China. “Goods and services labeled ‘Made in China’ automatically receive a 20% price advantage in public tenders by the Chinese government, which is fundamentally unfair. This system is clearly manipulated systematically.”
Subsidies from the Chinese government to Chinese companies amount to about 20%, giving Chinese goods a head start and making them competitively priced in the global market.
Von der Leyen stated that the EU faces “very real risks” brought by China that are both strategic and systematic.
“These risks impact our security and competitiveness. They stem from China having a fundamentally different system. Moreover, it has unique means to circumvent rules,” von der Leyen said.
She also strongly questioned Beijing’s position on the Russia-Ukraine conflict.
“We know that China’s firm support for Russia is exacerbating instability and insecurity in Europe. It can be said that Beijing is practically fueling Russia’s war economy,” she added.
Von der Leyen warned, “We cannot accept this situation. I have always said that how Beijing continues to engage in this war dynamic with Putin will be a decisive factor for the future of EU-China relations.”
According to the South China Morning Post, during Chinese Foreign Minister Wang Yi’s visit to Europe, he told the EU’s top diplomat that Beijing cannot afford Russia’s failure in the Ukraine conflict as it fears the United States will then shift its focus entirely to Beijing.
One interpretation within the EU of Wang Yi’s statements is that prolonging the war may suit Beijing’s strategic needs, as it can continue to divert U.S. attention on the Ukraine issue.
The three-year ongoing Russia-Ukraine conflict is one of the major points of friction between the EU and China, with the EU long criticizing Beijing for providing dual-use military and civilian goods to Russia. Beijing denies this and claims to be a peace builder. However, China has never criticized Russia’s invasion of Ukraine and maintains close diplomatic and economic ties with Russia as before.
Looking ahead to the upcoming summit, von der Leyen outlined three priorities for the EU: recalibrating the EU-China economic relationship, reducing risks, and advancing diplomatic cooperation on global issues, including climate change.
In conclusion, von der Leyen stated, “We will mitigate economic risks, but we do not want to decouple… We are ready to build a more balanced and stable EU-China relationship.”