New mechanism to keep ties with EU on right track

The launch of the China-EU trade and investment consultation mechanism is expected to provide a regular platform for dialogue to address bilateral economic differences, said market watchers and business leaders.

While trade frictions between China and the European Union may persist in the near term, the new mechanism could help prevent disputes from escalating and keep bilateral economic relations on a more predictable track, they added.

According to a joint statement issued on Tuesday, Chinese Commerce Minister Wang Wentao and European Commissioner for Trade and Economic Security, Interinstitutional Relations and Transparency Maros Sefcovic identified four initial work streams during the inaugural meeting of the China-EU trade and investment consultation mechanism in Brussels on Monday.

The work streams cover trade and investment balancing, export controls, intellectual property rights and World Trade Organization reform, the statement said.

Zhao Yongsheng, a professor of European studies at the University of International Business and Economics in Beijing, said that the mechanism comes at a time when both sides continue to face structural differences over trade and industrial policies.

Huang Yiping, dean of Peking University's National School of Development, said those differences reflect broader questions about whether traditional industrial powers can adapt as China's competitiveness expands into sectors long regarded as their technological strongholds.

"Those structural differences are unlikely to disappear, but dialogue can keep competition manageable and preserve space for cooperation where interests continue to overlap," he said.

Business leaders noted that China and the EU remain important trading partners, as robust trade flows continue to demonstrate the resilience of bilateral economic ties.

According to data from the General Administration of Customs, the value of China-EU trade increased 10.3 percent year-on-year to 2.53 trillion yuan ($373 billion) in the first five months of this year, while China's imports from the EU grew 5.2 percent.

Speaking at a monthly news briefing in Beijing on Tuesday, Wang Yifei, a spokeswoman for the China Council for the Promotion of International Trade, said Chinese businesses hope that China and the EU will resolve trade issues through dialogue, while ensuring a fair, transparent and nondiscriminatory business environment.

For businesses in the EU, maintaining communications has become more important than ever because both economies remain deeply intertwined, especially in the manufacturing, investment and technology sectors.

Speaking to China Daily during a recent interview, Michael Schumann, chairman of the German Federal Association for Economic Development and Foreign Trade, said: "Europe cannot be (economically) independent from the United States, and it cannot be independent from China. Our economies, technologies, supply chains and security structures are far too deeply interconnected."

Businesses can translate political consensus into practical cooperation through investment, trade and industrial partnerships, he added.

Christophe Lauras, president of the French Chamber of Commerce and Industry in China, said that France and China have a highly complementary relationship in sectors such as aerospace, advanced engineering, luxury goods, agriculture, energy transition and healthcare.

"Many French companies plan to establish research and development centers in China, while Chinese companies are expanding globally by strengthening their presence in France. The next stage requires deeper integration to achieve mutually beneficial cooperation," Lauras said.

The commitment is also reflected in fresh investment. German chemical manufacturer Covestro announced on Tuesday that it will build a new production line for methylene diphenyl diisocyanate at its integrated site in Shanghai, with an annual capacity of 660,000 metric tons. Operations are expected to begin around 2030. MDI is a synthetic chemical used primarily to manufacture polyurethane foams and coatings.

Holly Lei, president of Covestro China, said the move underscores the company's long-term commitment to China and leverages the country's integrated industrial ecosystem, innovation capabilities and talent base to strengthen MDI supply for customers in China and the Asia-Pacific region.