A China-Europe freight train sets off slowly after being supervised by the customs in Jinhua, Zhejiang province, on April 1. HU XIAOFEI/FOR CHINA DAILY
As trade tensions between China and the European Union show signs of escalating, economists and executives are calling on Brussels to abandon its “de-risking” strategy, strengthen dialogue with Beijing and enhance its competitiveness and supply chain resilience through deeper cooperation — a move they say would provide much-needed certainty for the global economy.
The call comes after Brussels, since the start of the year, has been expanding its trade defense arsenal, unveiling a series of restrictive measures targeting Chinese enterprises and products.
Most recently, its push to force EU companies to diversify suppliers under the bloc’s proposed revision of the Cybersecurity Act is piling on yet more investment barriers and institutional discrimination, with China bearing the brunt.
“China-EU economic and trade cooperation stems from shared interests, and its essence is the result of comparative advantages and market competition,” said Wang Xuekun, head of the Chinese Academy of International Trade and Economic Cooperation.
“Complementarity is not a risk, and the integration of interests is not a threat,” Wang added, stressing that the EU’s push to force companies to diversify supply chains in the name of reducing “excessive dependency” on China is nothing more than protectionism dressed in new language.
A joint report by the China Chamber of Commerce to the EU and KPMG in May estimated that the forced replacement of Chinese suppliers could cost the EU nearly 367.8 billion euros ($417.9 billion) over five years, with Germany bearing the heaviest burden at 170.8 billion euros.
The report noted the mandatory replacement of Chinese suppliers as “unlikely to achieve meaningful security gains”. Instead, it warned of systemic negative effects: innovation budgets could be crowded out, fiscal burdens on member states increased, and household incomes eroded.
“Protectionism is unlikely to address the competitiveness challenges facing the EU,” said Sun Yawen, an assistant research fellow at the Institute of European Studies, Chinese Academy of Social Sciences.
Sun noted the core issues of its declining competitiveness lie in deep-seated structural challenges, including its fragile energy system, high labor costs, rigid and cumbersome regulatory frameworks, and difficulties in coordination among member states.
“The EU’s increasingly closed internal market is hindering its ability to learn from and absorb cutting-edge technologies, thereby constraining potential pathways for industrial catch-up,” Sun said.
Meanwhile, the continuous escalation of protectionist measures is unlikely to stimulate innovation among EU companies, trapping the EU in a vicious cycle where more protection leads to falling further behind, Sun added.
Tanks to chinadaily.com.cn
Please visit:
Our Sponsor