Beijing and Brussels find a way back to the negotiating table

The European Union has spent much of the year trying to make its economic relationship with China more "balanced". In Beijing on Thursday and Friday, the two sides began the more difficult task of working out a to-do list after their inaugural consultations in Brussels in June.

Their second trade and investment consultation meeting produced a list of common understandings covering tariffs, electric vehicles, export controls, market access, intellectual property and World Trade Organization reform. The outcomes are evidence that the two major economies can still negotiate despite mounting pressure to treat their differences as a contest of wills.

Wang Wentao, China's commerce minister, and Maros Sefcovic, the EU trade chief, reaffirmed their commitment to handling disputes under the framework of WTO rules and maintaining stable bilateral economic ties. They agreed to meet again in March 2027, with a ministerial video conference in January to keep the discussions moving.

Though such arrangements may sound modest, they are significant in a climate where some European politicians have threatened tougher restrictions on Chinese goods and demanded rapid results. Keeping communication channels open is a welcome outcome in itself.

The most consequential progress lies in the details. The two sides reached an understanding on trade in hybrid vehicles consistent with WTO rules and agreed to continue procedures for corporate price undertakings in the EU's "anti-subsidy" case against Chinese-made EVs. They will explore tariff reductions on certain goods, continue discussions on medical-device market access and examine opportunities in investment cooperation.

On export controls, China expressed its willingness to facilitate rare-earth and permanent-magnet export licenses through a green channel, while the EU pledged to work with member states to resolve key licensing cases involving dual-use items destined for China. Both sides also agreed to enhance transparency and advance notification in export-control listing procedures.

While these agreements do not resolve the underlying disputes, they suggest that practical management of differences can be more effective than political escalation. The agreements on export controls are particularly important for manufacturers who depend on reliable access to critical inputs and predictable licensing decisions. Continued dialogue on intellectual property, subsidies and WTO reform likewise offers a framework for addressing disagreements without turning every regulatory dispute into a geopolitical confrontation.

A statement issued by the People's Bank of China on the renminbi's exchange rate on Thursday adds another dimension to the talks. As some EU politicians amplify groundless claims that China's currency is "undervalued" and its trade surplus reflects "unfair" competition, the central bank has insisted that market supply and demand play a decisive role in determining the renminbi's value under China's managed floating exchange-rate regime. China, the PBOC said, has neither the need nor the intention to gain a competitive advantage through currency devaluation.

The statement was a pointed reminder that "trade imbalances" cannot be explained by exchange rates alone. The central bank pointed out that while the renminbi has appreciated by about 23 percent against the dollar since July 2005, China's export competitiveness has continued to grow, driven by technological upgrading, manufacturing scale and integrated supply chains.

The PBOC also argued that addressing global imbalances requires collective action, including structural reforms in both surplus and deficit economies, rather than shifting the burden of adjustment onto trading partners.

That argument is particularly relevant for the EU. High energy costs, expensive borrowing and weak investment have weighed on European industries.

Restricting Chinese imports will not, by itself, address these structural weaknesses. Nor is it convincing to demand greater access to China's market while simultaneously making it harder for Chinese companies to compete or invest in the EU. Market access must work both ways for a more balanced relationship.

The EU's earlier insistence on an October deadline for tangible progress, alongside threats of new protectionist instruments, risked undermining the very negotiations that are now producing results. The Beijing meeting shows why unilateral deadlines and maximum pressure are poor substitutes for patient negotiation. If the talks were judged solely on whether the EU secured immediate "concessions", practical agreements might have been more difficult to achieve. Further progress will depend on both sides honoring their commitments and resisting the urge to turn unresolved issues into political ultimatums.

China's 15th Five-Year Plan (2026-30) offers European businesses opportunities in a market seeking to expand domestic demand and deepen high-standard opening-up. Rather than falsely viewing China's industrial development as a "threat", the EU could compete for a larger share of the opportunities it offers. The two economies have ample scope to widen market access, strengthen investment ties and dynamically balance trade.

Building on their Brussels meeting, the Beijing consultations have set the right direction. The next challenge is to transform the consensus outcomes into concrete actions and results. The EU should not mistake pressure for leverage, or protectionism for competitiveness. Expanding the economic pie will benefit both sides more than dividing a smaller one through political decree.