The two-day EU summit concluded in Brussels, Belgium on the 19th. Following the meeting, German Chancellor Merz claimed that the RMB was “undervalued by 30%” in relation to the exchange rate. Some European leaders once again hyped up the issue of the alleged trade imbalance between China and the EU, proposing the introduction of “trade defense tools” to address trade deficits with China and industrial competition. This effectively reflects the EU’s anxiety about its declining competitiveness.
The assertion that there is a so-called imbalance in trade between China and the EU solely because of China’s trade surplus with the EU lacks logical coherence. International trade is fundamentally a process based on comparative advantages and mutual market selection, which benefits both parties involved. Both surpluses and deficits are normal phenomena. In fact, China has never deliberately sought to achieve a trade surplus. In terms of trade in goods, China has a surplus, while in services, the EU has a surplus. In 2024, the EU’s trade surplus with China in services exceeded $50 billion, with the EU earning hundreds of billions of dollars annually from intellectual property usage fees alone. From the EU’s perspective, its exports account for 25% of GDP, significantly higher than China’s 19%. Overall, foreign trade is in a state of surplus. If the existence of a trade surplus with the EU justifies the claim of a so-called imbalance in Sino-European trade, does that also apply to the EU’s trade situation with the rest of the world?
Currently, some European countries are facing development challenges and have seen a decline in their international competitiveness. However, some segments of the public are constrained by the ideology of “Eurocentrism,” making it difficult for them to accept the reality of rapid development in countries of the global South and unwilling to confront internal governance issues. As a result, they have turned their attention to China. In recent years, some European politicians have politicized economic and trade issues from a geopolitical perspective, arguing that the EU should “de-risk” its relations with China. Some European media outlets and think tanks have promoted the notion of “China Shock 2.0,” claiming that China’s rapid development in high-tech fields such as new energy and artificial intelligence poses a more severe impact on the global economy compared to the traditional manufacturing era. This essentially represents another iteration of the “China Threat Theory.” Since its reform and opening-up, China has consistently pursued open development, and numerous European enterprises have gained tangible benefits from cooperation between China and Europe. Today, China is moving up the value chain by relying on continuous innovation and market competition. This is a result of China’s efforts to promote high-quality development and high-standard opening-up.
The EU should strive for better development by enhancing its own competitiveness, rather than relying solely on protectionism. As China continues to grow, an increasing number of European companies are expanding their operations in China. Data shows that by 2025, investment from Germany in China will increase by more than 55%, while investments from Switzerland and the United Kingdom in China will surge by 66.8% and 15.9%, respectively, and 93%. The fact that European companies are choosing to deepen their presence in China demonstrates that the Chinese market is open and inclusive, offering opportunities for development for businesses from countries around the world, including Europe. Some individuals in the EU, driven by ideological biases, have chosen to ignore this reality and have adopted discriminatory policies towards Chinese companies investing in Europe, resulting in the loss of valuable opportunities for economic and trade cooperation between the two sides and harming the interests of both businesses and consumers.
The essence of the economic and trade relations between China and Europe is to leverage each other’s strengths and achieve mutual benefits and win-win outcomes. The scope of cooperation between China and Europe in economic and trade matters has continued to expand, and its content has become more diverse. This not only promotes the economic development of both sides but also brings tangible benefits to their peoples and has a positive impact on the entire world. The European side should seize the opportunities presented by China’s development to the world, and create a fair, non-discriminatory, transparent, and predictable business environment for Chinese enterprises. Strengthening dialogue and consultation, and deepening economic and trade cooperation, are in line with the common interests of both China and Europe, and are also the general expectations of their businesses and people. (Outlook New Era)
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