Together with Commission President Ursula von der Leyen and the President of the European Council Charles Michel, I participated in the EU-China Summit, the first held in-person since 2019. It followed the Strategic Dialog  held in Beijing two months ago. We had frank and candid meetings with President Xi Jinping, Premier Li Qiang, and Director of the Central Foreign Affairs Commission of the Chinese Communist Party and Minister of Foreign Affairs Wang Yi. 

After the last EU-China Summit in April 2022, I spoke of a dialogue of the deaf. This time, the tone was different. There was recognition on both sides of the importance of our relationship and the need to manage our differences. We have come through a sensitive period marked by tensions due to sanctions and counter-sanctions.  

“After the last EU-China Summit, I spoke of a dialogue of the deaf. This time, the tone was different. There was recognition on both sides of the importance of our relationship and the need to manage our differences.” 

We covered the full breadth of our bilateral relations, including areas of disagreement such as Russia’s war of aggression against Ukraine – where we also addressed the role of some Chinese companies in circumventing sanctions against Moscow; the situation in the Taiwan Strait and the South China Sea; human rights issues and the ongoing sanctions against members of the European Parliament. In contrast, on the war in the Middle East we found some further convergence of our positions during a lunch with President Xi Jinping. 

At the forefront of our discussions, however, were two policy areas that mirror the complexity of our relations. On the one hand, trade and investment, where we are facing growing imbalances and competition and, on the other hand, climate change and the green transition, where EU-Chinese partnership is key to the future of our planet. 

Addressing Trade Imbalances 

With a daily trade of goods worth €2.3bn, the EU and Chinese economies are deeply interconnected. However, this trade relationship has become critically unbalanced. EU imports constitute two-thirds of this trade, while our exports account for just one-third. After consistently growing over the past two decades, our trade deficit with China more than doubled in just two years, between 2020 and 2022, reaching nearly €400bn. It is necessary to study whether this upsurge is an exceptional occurrence due to the end of the COVID pandemic, or if it represents a structural trend, which would be both worrisome and unsustainable.  

This disparity is in any case not the result of European businesses lacking competitiveness; it is rooted in systemic trade distortions, including limited market access for foreign companies in China and major subsidies granted by Beijing to its producers. China has built up massive overcapacities, particularly in sectors like electric vehicles, solar panels, batteries, and wind energy. By 2030, an estimated 60% of Chinese manufacturing in clean energy technologies will be destined for export. Some other major economies have already taken actions to shield themselves from these overcapacities, which will further divert them to the European market. This is already happening for solar panels.  

“China has built up massive overcapacities, particularly in sectors like electric vehicles, solar panels, batteries, and wind energy. By 2030, an estimated 60% of Chinese manufacturing in clean energy technologies will be destined for export.” 

These developments pose a direct challenge to the EU's industry, especially during a critical period of technological transformation. They have led to increasing calls across Europe to protect our market. In Beijing, we have been very clear that China has to act to address those distortions or the EU will have no choice but to take action, as we have begun to do when launching the anti-subsidy investigation on Chinese electric vehicle imports in October.  

While we achieved some acknowledgment from the Chinese leadership that trade should be balanced, our assessments of the causes of the imbalances differed significantly. Beijing views its trade surpluses as stemming from the innovative strength of Chinese industries and points to European export restrictions on advanced technologies, of which China would be willing to import more. They claim that Europe also has overcapacity, in some sectors.  

“It is not the EU’s goal to decouple from China, but we must safeguard our economic security by addressing excessive dependencies and diversifying our supply chains.” 

Our Chinese partners also pushed back against being labelled a 'systemic rival' in certain areas, and questioned the European de-risking strategy, which they tend to view as similar to decoupling. They argue that Europe and China have different socio-political systems and that China does not wish to engage in a systemic rivalry. To them, the word “rival” might convey a sense of “enemy”, a connotation that it does not have in English. We are indeed rivals, not enemies. 

The summit provided an opportunity to explain our stance: De-risking is not an anti-Chinese move, but a matter of common sense and of risk management. It is not the EU’s goal to decouple from China, but we must safeguard our economic security by addressing excessive dependencies and diversifying our supply chains. This became evident during the pandemic when, for instance, we realised that Europe didn't produce even a gram of paracetamol. Our goal is to keep an open economy while minimising risks. Recent export restrictions by China on raw materials, such as gallium, germanium, and graphite, have only intensified the EU's focus on this approach.  

China itself has a longstanding policy in that domain, as I explained at Peking University in October. In the words of President Xi Jinping: “China needs to build a domestic supply system that is independently controllable, secure and reliable so that self-circulation can be accomplished at critical moments without having strong dependencies on others.” The EU’s de-risking strategy does not aim at achieving independently controllable supply chains, but only at diversification of supplies.  

Some Areas for Improvements 

At the Summit, the EU proposed several areas where improvements should be made to re-establish trust and avoid a downward spiral in EU-China relations. These include discouraging practices that could amount to dumping in the wind turbine sector, easing cross-border data flows, regionalizing the approach to trade in food products, and ending discrimination in market access for procurement, particularly in sectors such as medical devices.  

Furthermore, we emphasized the importance of China's engagement in a credible WTO reform process, including on trade and state intervention in industrial sectors. 

Climate Change: A Shared Responsibility 

Against the backdrop of COP28, we asked our Chinese partners to build on the positive cooperation on climate and environment that we already have, both bilaterally and in multilateral fora. At the climate conference in Dubai, global contributions and commitments must match the needs of our planet and of developing countries to adapt to climate change. 

This is first and foremost the responsibility of major emitters like China, the US, and the EU. With the European Green Deal, the EU intends to reduce its greenhouse gas emissions by at least 55%, produce more than 42.5% of our energy from renewable sources, and increase energy efficiency by at least 11.7% by 2030. We intend to become climate-neutral by 2050. 

China, for its part, has reduced its greenhouse gas emissions intensity per unit of GDP and recently begun to tackle methane emissions. Its ongoing expansion in renewable energy is remarkable. According to the IEA, almost half of all the renewable capacity added globally last year was installed in China. In 2024, China is expected to account for almost 55% of new global deployment of renewable energy capacity. 

“China accounts for more than half of the world’s coal use and keeps constructing new coal power plants, accounting for more than 70% of the world’s coal power projects. This is raising concerns.” 

Nevertheless, fossil fuels, particularly coal, continue to play a major role in China’s energy mix. Currently, China accounts for more than half of the world’s coal use and this is not expected to change in the short term. Coal demand in China grew 4.6% in 2022 and is expected to increase by another 3.3% this year. Furthermore, China is still constructing new coal power plants, accounting for more than 70% of the new world’s coal power projects. With China contributing 28% of greenhouse gases emissions, the world needs China to take more substantial actions. 

At the Summit, we have agreed to enhance cooperation on Emissions Trading Systems and to continue dialogue on circular economy. We have also encouraged our interlocutors to commit to two critical initiatives at the COP28: the Global Pledge to triple renewable capacity and double energy efficiency by 2030, and the Global Methane Pledge to reduce methane emissions by at least 30% by 2030. 

Continued Engagement, Managing Differences 

The EU and China have important differences on many issues, notably on trade and political matters, which need to be carefully managed. It is important that we stand up for European interests and values. At the same time, China remains a pivotal partner for the EU in addressing many global challenges, including climate, biodiversity, debt, health, and international stability. We will continue to engage at all levels and push for progress across both the bilateral and global agendas.