EU seeks to balance trade with China

Ursula von der Leyen, president of the European Union (EU) Commission, said that the trade deficit with China reached 400 billion euros in 10 years and they wanted to eliminate the imbalance in trade relations.

Von der Leyen was speaking at the China Policy session of the G7 Leaders’ Summit in Hiroshima, Japan.

Von der Leyen said: “Since China has changed, our policy towards this country must also change” and that China has turned to security and control instead of reform and opening up.

Von der Leyen explained that China has recently resorted to more repressive policies at home and assertive policies abroad.

‘BREAKING TIES WITH CHINA DOES NOT BENEFIT US’

Noting that China established unlimited friendship with Russia before the invasion of Ukraine, von der Leyen said: “It is not feasible or in our interest to break ties with China.”

Von der Leyen stated that they should keep communication channels open and work together with China in various fields such as climate change, epidemic preparedness, financial stability or nuclear weapons proliferation.

Noting the importance of reducing economic risks, von der Leyen said: “We have to reduce our vulnerabilities in our economic relations with China.”

Noting that they need to make their economies and related sectors more competitive and resilient in areas such as healthcare, digital and clean technology, von der Leyen said: “We have similar ideas for building capacity in topics such as rare earth elements, batteries and active ingredients in drugs and to reduce our dependence on China. We have to work with partners who have

THE TRADE DEFICIT HAS TRIPLED IN 10 YEARS

Emphasizing that they want to rebalance trade relations with China, von der Leyen said: “China is a vital trading partner for us and most of this trade is mutually beneficial. However, it is a fact that the trade deficit between the EU and China has tripled in 10 years and reaches 400,000 million euros.

Von der Leyen explained that trade imbalances with China are caused by non-market practices such as hidden subsidies, discrimination in government procurement, and distortions introduced by China’s state capitalist system, and they must address these distortions.

Von der Leyen stated that they should also protect their security interests, focusing on sensitive high-tech areas and discussing controls on exports or investments going to China.

Von der Leyen noted the importance of the G7 countries taking a common stance on key foreign and security policy issues.

Expressing that they want peace and stability in the Taiwan Strait, von der Leyen stressed that they are against any unilateral changes to the status quo, especially by force.

Von der Leyen added that they should intensify their efforts to develop an alternative to China’s Belt and Road Initiative in global investment and infrastructure partnerships.
The leaders of the US, France, England, Germany, Canada and Italy attend the G7 summit hosted by Japanese Prime Minister Kishida Fumio.

In addition to the G7 countries, the EU, Indonesia, India, South Korea, Australia and Vietnam are also participating in the summit. (AA)