EU chief to urge ‘fair’ China competition in talks with Xi

Brussels — EU chief Ursula von der Leyen said Monday she will press for “fair” competition with China in talks with its President Xi Jinping, who is in Paris on a state visit.

“We have to act to make sure that competition is fair and not distorted,” she said in remarks issued hours before a face-to-face Paris meeting between her, Xi and French President Emmanuel Macron.  

She added that, previously with Xi, “I have made clear that the current imbalances in market access are not sustainable and need to be addressed.”

Von der Leyen’s European Commission, the European Union’s authority on trade issues, has opened a slew of competition probes targeting China in recent months.

Beijing has reacted furiously to the most recent investigation, into suspected inequitable access to China’s medical devices market, calling it a sign of EU “protectionism.”

China is also angry at an EU probe into Chinese wind turbine suppliers for the European market. Other Brussels investigations have focused on Chinese subsidies for solar panels, electric vehicles (EVs) and trains.

Von der Leyen reiterated the EU’s position that it “should derisk its relations, but not decouple from China” — meaning reducing the dependence on Chinese suppliers but not going as far as the United States in penalizing or blocking trade streams in key sectors.

“We have been very clear-eyed about our relationship with China, which is one of the most complex, but also one of the most important,” the commission president said.

“Over the last year, I have met with President Xi twice and we have spent some time discussing the EU-China relations from trade to climate, from global affairs to digital issues,” she said.

Von der Leyen stressed the problem of Chinese overcapacity and the way that was leading to Chinese goods entering the European Union at prices too low for EU firms to compete with.

“China is currently manufacturing, with massive subsidies, more than it is selling due to its own weak domestic demand. This is leading to an oversupply of Chinese subsidized goods, such as EVs and steel, that is leading to unfair trade,” she said.

“Europe cannot accept such market distorting practices that could lead to de-industrialization in Europe.”

Von der Leyen said she would “encourage the Chinese government to address these overcapacities in the short-term,” adding that the EU will work with other wealthy and emerging economies that were “increasingly affected by China’s market distortions.”