EU warns China that European public could turn more protectionist if trade deficit isn’t reduced

BEIJING –

The European Union’s top foreign policy official warned Friday that public sentiment in Europe could turn more protectionist if the region’s trade deficit with China is not reduced.

Josep Borrell, the EU high representative for foreign affairs, called for improved access for European companies that want to export to or invest in China. He said that political leaders in Europe could face pressure from voters to disengage from the world’s second-largest economy.

“And we don’t want to disengage and much less, much less, to decouple from China,” Borrell said in a speech at Peking University, one of China’s top schools.

The EU trade deficit with China topped US$17 billion in September, bringing the total for the first nine months of the year to US$170 billion, according to Chinese trade figures released Friday.

Chinese Foreign Minister Wang Yi acknowledged the European Union’s concerns after talks with Borrell later Friday.

“China attaches importance to the economic and trade concerns of the European side and is willing to further deepen reform and opening up and provide a more favourable environment for EU enterprises to operate in China,” he said at a joint news conference with his European counterpart.

Wang said the Chinese side had also expressed concern about a recently launched EU investigation into subsidies for the Chinse electric vehicle industry. “We urge the EU to avoid protectionist behaviour and be prudent in the use of trade remedy measures,” he said.

Borrell is the latest EU official to visit China as the two sides lay the groundwork for a leaders summit later this year. Energy Commissioner Kadri Simson is in Beijing this week and Economy and Trade Commissioner Valdis Dombrovskis came last month.

The EU and China need to rebuild trust so that they can jointly tackle common challenges including climate change, global health and the indebtedness of developing nations, Borrell said.

“We believe that despite our considerable differences, that should not be underestimated, there is a lot of scope, a lot of room for us to work together,” he said.

China is trying to reduce tensions over trade and other issues with the EU and the United States, both important export markets. A U.S. Senate delegation visited China earlier this week, following a series of visits by top administration officials as the two countries try to arrange a meeting between Presidents Xi Jinping and Joe Biden in November.

Borrell urged China to step up humanitarian assistance to Ukraine, suggesting it launch a high-profile cultural initiative because of the destruction of historical and cultural heritage in the war.

“We are not asking China to adopt the same standpoint as the European Union,” he said, acknowledging that China has political constraints. “But we consider it essential that China makes a major effort to convince the people of Ukraine that China is not Russia’s ally in this war.”

He also said that although the EU has ties with Taiwan, it does not recognize the self-governing island as an independent country. He added that the EU opposes the use of coercion and provocation, and that the tensions between Taiwan and China must be resolved through dialogue, not force.