EU countries are increasingly confronted with imports of, among other things, cheap Chinese electric cars, solar panels, and wind turbines. This is further escalating tensions between the European Union and China. There is growing fear that the economic relationship between the two economic giants is entering a new and more difficult phase.
Trade war
The European Commission seems determined to continue with measures aimed at better protecting European companies from competition from China. So far, Brussels has not been deterred by warnings of possible Chinese countermeasures. At the same time, warnings are increasingly voiced that current developments could lead to a broader trade war.
An important source of concern is the large trade deficit the European Union has with China. European countries import far more goods from China than they export there. According to European policymakers and companies, this gap continues to grow. The import of industrial products from China is especially central to this issue.
Promotion
Competition
According to many European politicians and business representatives, competition from China puts increasing pressure on European industries. However, there is no full consensus within the European Union on the proper approach. Some member states believe Europe needs to act faster and more decisively to protect its own industry. They advocate for more measures to limit the effects of Chinese competition.
France and Italy are among the countries explicitly calling for a tougher stance. They warn that otherwise European companies will find it increasingly difficult to compete with Chinese producers and believe Europe must more vigorously defend its economic interests.
More cautious
Other countries take a more cautious view of new trade measures. Germany is often cited as one of the EU countries that are more reserved. This is partly because many German companies have significant economic interests in trade with China. A further deterioration of the relationship could also have repercussions for European exporters.
This is why the discussion about China is rising higher on the European political agenda. While some countries press for extra protection of the European economy, others emphasize the importance of caution to avoid further escalation. This means the European Union faces the challenge of finding a common course in a relationship that remains of great economic importance for both Europe and China.