BUSINESSEUROPE: THE EU MUST TAKE A STRATEGIC, LONG-TERM, AND UNIFIED APPROACH TO CHINA

BusinessEurope has today published a new paper outlining its priorities for EU-China relations over the coming EU cycle. Commenting on the publication, BusinessEurope Director General Markus J. Beyrer said: 

“As the world's second-largest economy and the second-largest EU trading partner in goods, China is and will remain a crucial market for European companies. Fostering a mutually beneficial relationship should remain a core objective for both the EU and China. However, the increasing risks and challenges of doing business in and with China cannot be ignored. Companies now need to navigate an increasingly challenging geopolitical context, growing imbalances, and a lack of reciprocity in the Chinese market. Domestic demand in China remains sluggish, while market distortions and overcapacities continue to emerge. 

The EU’s "de-risking" strategy should focus on building resilience through market diversification, reducing vulnerabilities and managing risks, especially in strategic sectors like critical raw materials. To safeguard industrial competitiveness, the EU must also make full use of its strengthened trade policy toolbox to counter market distortions and protect its interests effectively. At the same time, the EU should remain open and advance an ambitious and proactive trade agenda. 

Boosting the EU’s own competitiveness is the key factor and prerequisite to improving its economic resilience. The share of sectors where China directly competes with Euro area exporters has risen to nearly 40%, up from 25% in 2002. As emphasised in the Draghi and Letta Reports, along with the political guidelines for the next European Commission, “prosperity and competitiveness” must be Europe’s top priorities. 

Finally, it is crucial that EU Member States act in unison when dealing with China. Only a united and strong Europe can wield the economic and political leverage needed to effectively engage and compete with China. The EU’s approach should be strategic and long-term, moving beyond reactive, short-term responses.” 

To read the full paper, click here.