EU's use of maximum pressure belies its faith in talks to resolve disputes: China Daily editorial

Despite mounting challenges facing China-EU economic and trade relations, the European Union, rather than responding to China's concerns and taking concrete actions to address them, has indicated that it will adopt even more aggressive protectionist and restrictive measures targeting China.

European Central Bank chief Christine Lagarde last week pointed an accusing finger at China for allegedly "manipulating" its currency, which she said is about 15 or 16 percent "undervalued" and causes "imbalances" that "endanger" the global economy.

Her remarks reflect some EU politicians' dissatisfaction with the current state of China-EU trade, which they describe as "unsustainable". The EU's goods deficit against China increased to nearly 360 billion euros ($409 billion) last year, up from 305 billion euros the year before. Brussels has signaled repeatedly it is prepared to impose new tariffs and restrictions on Chinese goods and companies.

The EU's proposed revisions to its Cybersecurity Act and the Industrial Accelerator Act are expected to introduce additional barriers for Chinese companies and products. The EU is also reportedly considering imposing additional tariffs on Chinese-made plug-in hybrid vehicles. European Commission President Ursula von der Leyen has said that the bloc has a broad toolbox which it would use more proactively to safeguard its interests, while also developing new instruments.

These intimidating remarks come just before a major meeting under the China-EU trade and investment consultation mechanism scheduled for the coming week. They do not bode well for the prospect of achieving any substantial outcomes at the event. Instead, the EU's lack of sincerity in resolving economic and trade disputes risks escalating China-EU trade frictions.

Europe's justifications hinge on alleged "trade imbalances" with China and concerns over issues such as "subsidies" and "overcapacity". Yet these arguments are rooted in inaccurate and hostile interpretations and overlook the fact that Europe's economic woes stem mainly from declining manufacturing competitiveness, insufficient innovation capacity and surging energy costs.

China has always seen the EU as an important economic and trade partner. It wants to manage disputes with the bloc through dialogue and consultation, and promote pragmatic cooperation to advance the sound and steady development of bilateral economic and trade ties.

With the EU putting up barriers and engaging in protectionist acts, China has rightly pointed out that such moves will only prove counterproductive, undermine market rules, and disrupt global industry and supply chains.

Despite the danger of trade frictions escalating into a trade war, the EU seems ready to let the differences between the two sides hinder their consultations. It has so far failed to respond to China's concerns over the unreasonable suppression of Chinese enterprises and the continued abuse of investigation tools under its so-called "Foreign Subsidies Regulation".

Confronted with the EU's punitive measures, China has no choice but to pledge to take forceful and effective countermeasures. As some experts said, the countermeasures could include launching anti-discrimination investigations, conducting reviews into supply chain security, and imposing restrictions on some EU products.

China's rationality and restraint should not be mistaken for weakness and used as a pretext to escalate pressure. That would only take the EU further down the wrong path of confrontation.

The economic cooperation between China and the EU is pivotal to economic globalization. Preserving its stability is instrumental to upholding the world's economic and trade order and global economic system. The ongoing trade frictions, if mismanaged by the EU, might pose a challenge to the soundness of the global economy at large.

To break the deadlock, the EU should view the competitive dynamics and perceived security concerns in a more rational and objective manner and address these issues through openness rather than protectionism.

Economic and trade disputes should be resolved via bilateral coordination instead of unilateral protectionist policies and arbitrary regulatory moves. Trying to force China into submission through maximum pressure will only lead to a dead end.