The EU will not tolerate billions of losses with China: The trade deficit has doubled in the last two years

 

The first physical summit of the European Union and China since 2019, since such summit meetings were only in virtual form until yesterday, Ursula von der Leyen and Charles Michel, as the heads of the two most important EU institutions, used it to warn President Xi Jinping of the growing trade the deficit that the EU records in its relations with China, which "European leaders will not tolerate for a long time", as the President of the Commission said. The European Union wants the Chinese government to remove obstacles that the EU considers artificially and politically created, and to allow a greater presence of European goods and services in the Chinese market.

 

Italy left the 'Belt and Road'

 

The European Union's trade deficit with China has doubled in the last two years and will reach a record 390 billion euros in 2022. On a daily basis, goods worth 2.3 billion euros are traded between the EU and China. But: when you have three containers of goods coming from China to the EU, two of those three return to China empty, Ursula von der Leyen vividly described on the eve of yesterday's summit in Beijing. She repeated this, together with the President of the European Council, Charles Michel, both in front of Chinese President Xi and at the press conference after the summit in Beijing.

- China is the most important trading partner of the European Union, but there are clearly visible imbalances and differences that we must address - said Ursula von der Leyen. Italy is an example of a European country with an export-oriented industry that is frustrated by the growing trade deficit with China, so the government in Rome recently decided that Italy would withdraw from China's "Belt and Road" initiative. "Trade and economic relations should be more balanced, reciprocal and mutually beneficial. We will continue to work to ensure that our companies have equal opportunities. This should be the first step today - said the President of the European Council, Charles Michel, in Beijing.

 

Chinese President Xi had a message for European leaders, according to official Chinese sources, that the EU and China should resolve their differences through dialogue, and not through distancing, which is described in the EU as a policy of "de-risking", i.e. reducing the risk of dependence on China in strategic raw materials, green industrial production and the like. The two sides - said Xi, quoted by Chinese state television CCTV - "should not consider each other as rivals because they have different systems, should not reduce cooperation due to competition and clash due to differences".

In addition to trade imbalances, European leaders used the summit with Xi to convey the message that China, as a permanent member of the United Nations Security Council, has a special responsibility to preserve the fundamental principles of the UN Charter, which concern the inviolability of sovereignty and territorial integrity. Therefore, the EU appeals to China to influence Russia to stop its aggression against Ukraine. The Europeans are asking China to continue refraining from supplying Chinese weapons to Russia, but also to better prevent the use of Chinese companies to circumvent European and Western sanctions against Russia.

 

A two-state solution

 

On the subject of the Middle East, both sides reaffirmed their commitment to seeking a two-state peace solution, Israel and Palestine. European officials emphasized that the EU strongly condemns Hamas' terrorist attacks on Israel, that the EU emphasizes that Israel has the right to defend itself in accordance with international humanitarian law, and both sides agreed on the importance of protecting civilians in Gaza, the European Council said in a statement.