TMTPost -- Chinese President Xi Jinping denies accusation of China’s overpacacity in his visit to Europe.
Credit：Xinhua News Agency
Whether viewed from the perspective of comparative advantage or global market demand, there is no such thing as "China's overcapacity problem," Xi said when he made remarks at a China-France-EU trilateral meeting with French President Emmanuel Macron and European Commission President Ursula von der Leyen at Elysee Palace Monday, the state owned Xinhua News Agency reported.
China's new energy industry has made real progress in open competition and represents advanced production capacity, Xi noted, adding that it not only increases global supply and alleviates the pressure of global inflation, but also contributes significantly to global climate response and green transition. The president urged the two sides to properly address economic and trade frictions through dialogue and consultation, and accommodate each other's legitimate concerns.
China-EU relations enjoy strong endogenous driving force and bright prospects of development, and this relationship does not target any third party, nor should it be dependent on or dictated by any third party, Xi said. He said he hopes that the EU institutions develop the right perception of China and adopt a positive China policy. EU and China should respect each other's core interests and major concerns, safeguard the political foundation of their ties, and uphold the basic norms governing international relations, Xi said.
Von der Leyen said, according to Xinhua, the EU wishes to work with China in the spirit of mutual respect, seek common ground despite differences, enhance mutual trust, avoid misunderstanding, jointly uphold the international order based on international law, and promote world peace, security and prosperity. Given China's weight in global affairs, it is important that the EU maintains good relations with China, and this will determine whether global challenges such as climate change and the Ukraine crisis can be better addressed, the head of European Commission said.
Following her meeting with Xi, von der Leyen said the EU gets ready for deployment of all the tools to defend its economies if China fails to offer fair access to its markets, Bloomberg reported later Monday. “For trade to be fair, access to each other’s market also needs to be reciprocal,” von der Leyen said. “We discussed how to make real progress on market access. I remain confident that more progress can be achieved. At the same time, we stand ready to make full use of our trade defense instruments if this is necessary.” She was reported to add that heavily subsidized Chinese products like electric vehicles (EVs) and steel are flooding Europe, and said the world cannot absorb China’s surplus production.
The EU officially launched an investigation into EVs from China on October 4, 2023.The European Commission is set to decide whether to impose tariffs more than the current 10% standard rate for cars within 13 months once the investigation started. The possible tariff will affect not just Chinese automakers but also foreign brands that produce vehicles there such as Tesla, Renault and BMW. The move may result in tariffs close to the 27.5% level already imposed by the U.S. on Chinese EVs, Bloomberg reported last September following the von der Leyenan’s announcing the EV probe plan. Global markets “are now flooded with cheaper Chinese electric cars”, and their price is “kept artificially low by huge state subsidies”, which is distorting European market, von der Leyen said in her state of the union stress to the European parliament on September 13. Head of the executive arm said Europe is open for competition, not for a race to the bottom.
China felt very dissatisfied with EU’s investigation as it is based on subjective assumption, lacks adequate evidence, and doesn’t adhere to World Trade Organization rules, a spokesperson of the Ministry of Commerce commented right after EU’s opening investigation. In the high-level dialogue with EU representatives in September 2023, China has called the subsidy probe “naked protectionist behavior” under the cover of “fair trade”, and cautioned such attempt will severely disrupt and distort the global automotive industrial and supply chain, of which EU has a part, and impose negative impact on China and EU’s economic and trade relationship, the spokesperson said. The person said Beijing will keep a close eye on EU’s following investigative procedures and firmly protect rights and interests of Chinese firms.
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