China Trade Review | Looking Forward to China and Europe Setting a Model for Dealing with Trade Frictions

Just as public opinion was concerned about whether the trade friction between China and Europe would escalate into a "trade war", a temporary positive news came on June 22nd: China and Europe agreed to initiate negotiations on the EU's anti subsidy investigation into electric vehicles in China. On the same day, Minister of Commerce Wang Wentao stated during a meeting with German Deputy Prime Minister and Minister of Economy and Climate Protection Habeck that China has repeatedly urged the European side to return to the correct track of consensus in the trilateral meeting between Chinese, French, and European leaders, resolve differences through dialogue and consultation, and has already prepared for consultations.

The first choice is to negotiate rather than engage in a "trade war" recklessly, which indicates that both sides are still rational and restrained in their views on trade frictions. The consultation provides a platform for dialogue and exchange between China and Europe, in order to better understand each other's positions, explore possible solutions, and seek consensus. This is conducive to maintaining trade rules, promoting mutual understanding in the field of electric vehicles, and also promoting the healthy development of the global electric vehicle industry.

Singapore's Lianhe Zaobao reported on June 23 that the spokesman of the European Union said that the EU and Chinese economic and trade officials' consultations on the tariff case on electric vehicles with China were "frank and fruitful", and the two sides would continue to consult. From this perspective, we still have reason to expect better results from this consultation:

The essence of China Europe economic and trade cooperation is mutual benefit and win-win. The bilateral economic and trade cooperation between China and Europe has strong resilience. Currently, China remains the second largest trading partner, first largest source of imports, and third largest export market of the European Union. The European Union is China's second largest trading partner, second largest source of imports, and second largest export market. In 2023, the total import and export volume of goods between China and Europe reached 783 billion US dollars, and bilateral investment between China and Europe continued to expand, with investment stocks exceeding 250 billion US dollars. In recent years, the fields of economic and trade cooperation between China and Europe have continuously expanded. The two sides have achieved a series of achievements and consensus in macroeconomic policy coordination, industrial and supply chain cooperation, improving the business environment, WTO reform, two-way opening up of the financial industry, and regulatory cooperation. When the EU proposed to impose tariffs, European companies such as BMW and Mercedes Benz opposed it, believing that imposing tariffs would hinder the development of European car companies and also harm Europe's own interests.

Secondly, there is enormous potential for cooperation between China and Europe in the field of electric vehicles. In the current context of intensified global climate change, the close cooperation between China and Europe in the field of electric vehicles is not only related to the economic development of both sides, but also plays an important role in the global response to climate change and the achievement of the goals of the Paris Agreement. China has advanced technology, a huge market size, and a complete supply chain system, laying a solid foundation for the large-scale development of the world's electric vehicle industry; Europe, with its profound automotive industry heritage, excellent research and development capabilities, and well-known brands, can contribute to the further popularization of electric vehicles. The International Energy Agency estimates that the global demand for new energy vehicles will reach 45 million by 2030. However, the penetration rate of new energy vehicles in various countries is still relatively low. For example, the proportion of new energy vehicles in Europe is 18.5%, North America is 8.3%, and Asia is 2.8%. Without China Europe cooperation, the goal of 45 million vehicles may be difficult to achieve. The cooperation between China and Europe in the field of electric vehicles will be a deep integration oriented towards the future. Through technology sharing, supply chain and industrial chain cooperation, China and Europe can work together to reduce the production and consumption costs of electric vehicles, accelerate the popularization of clean energy transportation, and contribute to the global green and low-carbon transformation.

Thirdly, suppression cannot hinder the improvement of the competitiveness of Chinese enterprises. In the market competition, the quality of products and services is not decided by the politicians representing a certain interest group, but by the consumers who have the most say, and the market performance is the vane. Throughout history, from steel and cement to photovoltaic products, and then to electric vehicles, the rise of "Made in China" has been accompanied by various noises, and some countries have also continuously erected trade barriers and launched "double anti" investigations. But the short-term pains have not hindered the rise of Chinese companies, and the sign of "Made in China" is becoming increasingly clear. For example, Chinese company BYD has become a global partner for the European Championship, providing green transportation services for the tournament, which well reflects the recognition of Chinese electric vehicles by the European people. As pioneers in the automotive industry, Europe should show the confidence it deserves to engage in open cooperation and competition with Chinese companies, rather than following the United States waving tariffs and harming itself.

The consultation between China and Europe in the field of electric vehicles is not only a process of resolving trade disputes, but also a reflection of both sides exploring deepening cooperation and jointly addressing global challenges. Especially in the context of the rise of trade protectionism, as important economies in the world, if China and Europe can reach consensus through consultation, it will set an example for other countries to better cope with trade frictions and avoid a "trade war".

China's consistent stance is to prioritize peace and resolve issues through consultation and other means. But if the European side persists, China will take measures such as filing a lawsuit with the WTO dispute settlement mechanism to defend its legitimate and legitimate rights and interests. We hope that the frank and productive state of the consultations can continue, and we also hope that the European side can approach trade frictions with a more mature and rational attitude. We hope that the consultations can further consolidate and deepen China Europe economic and trade cooperation, and contribute to creating a greener, low-carbon, and sustainable world.