European President Says Trade Deficit With China Not 'Sustainable'
The top executive in the EU, European Commission President Ursula von der Leyen, told reporters in China that the trade deficit between the EU and China has more than tripled in a decade, and said she told the Chinese president "this trajectory is not sustainable and the underlying structural issues need to be addressed."
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At the start of her April 6 press conference, at the end of a day of meetings with top Chinese officials, von der Leyen said that China imposes "significant hurdles" to European food and agricultural commodity exports, and China excludes European medical devices and buys Chinese devices instead.
"So these sectoral issues are exacerbated by ever-growing requirements imposed by China that apply across the board: be it, for example, increasing pressures to submit to technology transfer; or be it excessive data requirements; or be it insufficient enforcement of intellectual property rights. All this puts European Union companies exporting to China, and also those producing in China, at a significant disadvantage, we discussed that," she said, according to a statement released by the EC.
She said that EU leadership does not believe that the EU should decouple from China. "I doubt that this is a viable or desirable strategy," she said. "I believe that we have to engage in de-risking. This means focusing on specific risks, while appreciating that there is of course a large majority of goods and services, so trade that is un-risky. Of course, different risks require different means to address them: We address the risk of dependencies through the diversification of our trade and investment relations. The risk of leakage of sensitive technologies that could be used for military purposes needs to be addressed through export controls or investment screening."
She said she talked to Chinese President Xi Jinping about examples of where the EU will "de-risk," but also said a high-level trade and economic dialogue will tackle specific complaints by European companies about market access for their goods or services.
In response to a question, von der Leyen noted that Europe's push for what it calls "open strategic autonomy" has been proven necessary given its recent experiences with critical dependency on imports from one source.
"Russia used this dependency to blackmail us ... by cutting 80% of the pipeline gas supply to the European Union within 8 months. This triggered a severe energy crisis, but we were able to withstand," she said, and did not give in to the blackmail.
That lesson means the EU has "to define where we see risks, then we have to address them; where we need to strengthen our supply chains, for example, where we need to diversify our supply chains."
She said the Comprehensive Agreement on Investment, a trade deal Europe concluded with China two years ago but has not moved toward ratifying, did not come up.