A recent commentary in Germany's Frankfurter Allgemeine Zeitung newspaper carried a headline: "Handel mit China: Deutschland ist ganz schön scheinheilig" (Trade with China: Germany is being quite hypocritical).
The article pointed out that Germany has long supported key industries, pursued an export-oriented economic strategy and maintained substantial trade surpluses, which its government has traditionally celebrated as evidence of the competitiveness of "Made in Germany" products.
Yet now that China has emerged as an increasingly formidable competitor and Germany is running a trade deficit with China, Berlin has begun criticizing China's trade surplus and supporting European Union measures to restrict Chinese imports. The commentary called out this apparent hypocrisy, exposing a double standard that has increasingly characterized Europe's approach to economic relations with China.
European Commission President Ursula von der Leyen has repeatedly highlighted the EU's trade deficit with China, which she says has reached 1 billion euros ($1.15 billion) a day, warning that the imbalance is unsustainable.
The figure may sound alarming, but the narrative surrounding it does not stand up to close scrutiny. To understand the double standards at work, it is worth examining four fundamental contradictions in Europe's approach to trade with China.
The first concerns trade surpluses and industrial overcapacity.
Germany is hardly the only export-oriented economy in Europe. The EU as a whole has long relied on overseas markets and maintained substantial trade surpluses with the rest of the world.
In 2025, the EU's 27 member states recorded a current account surplus of about 365.3 billion euros. Germany's current account surplus amounted to 4.5 percent of its GDP, while China's surplus was only 3.7 percent as a share of GDP.
The EU also recorded surpluses in both goods and services trade with the rest of the world. In other words, trade surpluses are a familiar feature of the European economy, not something unique to China.
Yet an economic bloc that has benefited enormously from exports now points to China's trade surplus as evidence of industrial overcapacity.
If a persistent trade surplus is sufficient proof of overcapacity, should the same scrutiny not be applied to Europe's own export industries?
Moreover, an economy's trade balance is not, in itself, a reliable measure of industrial overcapacity. Industrial capacity must be assessed against actual production, domestic and international demand, and market conditions.
China's industrial capacity utilization rate stood at 74.4 percent in 2025, according to the National Bureau of Statistics. The figure underscores the need for careful, sector-specific analysis rather than sweeping judgments based on trade surpluses alone.
The EU's inconsistency becomes even more apparent when its arguments during trade negotiations with the United States are considered.
When Washington complains about its trade deficit with Europe, EU officials invoke the rules-based multilateral trading system, emphasize the competitiveness and popularity of European products, and insist that running a trade surplus is not a wrongdoing.
They also repeatedly point out that while the EU maintains a goods trade surplus with the United States, it runs a deficit in services trade, arguing that both should be considered when assessing the overall economic relationship.
Yet when it comes to China, the EU appears to apply a different calculation. China's goods trade surplus is increasingly portrayed as evidence of unfair competition, while Europe's own substantial services trade surplus with China receives far less attention.
In 2025, the EU recorded a services trade surplus of 21.3 billion euros with China. That figure does not erase the goods trade deficit, but it certainly deserves a place in any objective assessment of bilateral trade.
The second contradiction concerns national security and fair competition.
There is an old Chinese saying about trade: One is willing to buy, and the other is willing to sell. Both sides enter into a transaction because they see value in it.
For a long period, China ran a trade deficit with the EU. Yet Beijing did not treat that imbalance as grounds for restricting European products, recognizing that trade patterns are fundamentally shaped by market demand.
Today, the EU appears to approach trade with China with two lists in hand: one containing agricultural products it is eager to export, and another containing advanced technologies it is reluctant to sell.
China, by contrast, has repeatedly expressed its willingness to expand imports of both European agricultural products and high-tech goods.
If Europe genuinely wants to narrow its trade deficit with China, it should offer more high-quality products and services that Chinese consumers and businesses actually want.
Advanced semiconductor manufacturing equipment provides a telling example.
Chinese companies have considerable demand for sophisticated lithography machines and other high-end equipment produced by European manufacturers. Such products are highly valuable and offer significant commercial opportunities for their suppliers. Yet security-related export controls restrict the sale of some of these technologies to China.
Meanwhile, Chinese electric vehicles have gained increasing popularity among European consumers because of their competitive prices and technological features. The EU, however, has imposed additional tariffs on Chinese-made electric vehicles, citing concerns over subsidies and unfair competition.
The result is a contradiction: Europe wants to expand exports to China but restricts some products that Chinese businesses are eager to buy, while simultaneously seeking to limit imports of Chinese products that European consumers want.
Such policies risk undermining the commercial interests of European businesses and the welfare of European consumers alike.
When European companies enjoy a technological advantage, free trade is treated as an essential principle. But when Chinese manufacturers become more competitive, the same principle appears to give way to concerns about economic security and industrial protection.
The United States has already demonstrated the potential consequences of this approach.
Washington's restrictions on advanced semiconductor exports to China, including chips developed by Nvidia, have accelerated Chinese efforts to develop domestic alternatives and reduce reliance on foreign technology.
Europe risks repeating that experience. If European suppliers decline to sell advanced equipment to China today, Chinese manufacturers will have stronger incentives to develop their own technologies. By the time restrictions are relaxed, the Chinese market may have become considerably less dependent on European products.
The third contradiction concerns government subsidies and industrial competitiveness.
The EU has long accused China of providing government subsidies that distort market competition. But government support for strategic industries is hardly unique to China.
China maintains that its industrial support policies comply with World Trade Organization rules and has submitted notifications of relevant subsidy programs. Where disagreements arise, they should be resolved through established international rules and procedures.
Meanwhile, the EU itself is a major provider of industrial subsidies.
According to the European Commission's State Aid Scoreboard, EU member states provided 168.2 billion euros in state aid in 2024, equivalent to 0.94 percent of the bloc's GDP. Germany accounted for more than 41 billion euros.
The support covered a wide range of areas, including environmental protection, energy efficiency, technological innovation and regional development.
The EU has also committed substantial financial resources through various industrial, recovery and green-transition programs designed to strengthen European companies and develop strategic industries.
These policies demonstrate that Brussels fully recognizes the role government support can play in encouraging innovation, reducing technological risks and nurturing new industries.
Why, then, should subsidies be considered legitimate instruments of industrial policy in Europe but treated as inherently suspect when provided by China?
The issue is not whether governments support their industries, but whether specific measures comply with international rules and whether companies can ultimately compete on the strength of their products.
Europe's own experience illustrates that public funding does not automatically produce industrial competitiveness.
Northvolt, the Swedish battery manufacturer once regarded as a potential European champion in the global battery industry, filed for bankruptcy in March 2025 despite having secured substantial public and private financial backing.
Its collapse reflected a combination of operational, financial and market difficulties, demonstrating that government support alone cannot overcome weaknesses in technology, production efficiency or business management.
Industrial competitiveness cannot be sustained indefinitely behind protective barriers. It ultimately depends on innovation, productivity and the ability to meet market demand.
The fourth contradiction concerns climate rules and protectionism.
The EU's Carbon Border Adjustment Mechanism entered its definitive phase on Jan 1, 2026, introducing carbon-related obligations on imports of products including steel, aluminum, cement and fertilizers.
The mechanism has generated considerable concern among trading partners, particularly developing countries, which fear that its implementation could create additional costs and barriers to international trade.
Chinese exporters have also raised concerns about the use of default emissions values in calculating the carbon content of imported products, including aluminum, arguing that such values may not adequately reflect the actual emissions performance of individual producers.
Fair and transparent carbon accounting is essential if environmental regulations are to be accepted as genuine climate measures rather than instruments of trade protection.
Yet while the EU is erecting increasingly demanding carbon-related barriers at its external borders, it is also seeking greater flexibility for industries within the bloc.
The European Commission has proposed easing its 2035 vehicle emissions requirements, allowing a continued role for some combustion-engine vehicles under specified conditions. The proposal represents a significant adjustment to the bloc's earlier commitment to a transition toward zero-emission new vehicles.
When Ursula von der Leyen first took office in 2019, she made the European Green Deal a centerpiece of her political agenda, presenting Europe as a global leader in the fight against climate change.
Now, confronted with mounting pressure from domestic industries, the EU is reconsidering some of the requirements it previously championed.
European policymakers are entitled to adjust their policies in response to economic realities. But it is difficult to justify demanding ever stricter standards from foreign producers while offering greater flexibility to domestic manufacturers.
If climate commitments can be adjusted to accommodate Europe's industrial interests, the legitimate development needs and technological circumstances of other countries should also receive fair consideration.
The EU cannot claim the moral authority of global climate leadership while allowing environmental regulations to become selective barriers against foreign competition.
A trade deficit of 1 billion euros a day is certainly a striking statistic, and it is understandable that it has attracted attention across Europe.
But the narrative built around that figure increasingly reflects a tendency to shift responsibility for Europe's economic difficulties onto China while overlooking inconsistencies in the EU's own policies.
The underlying challenges facing European industries — from sluggish productivity growth and high energy costs to technological competition and structural weaknesses — cannot be resolved simply by restricting Chinese imports.
China, for its part, has taken a constructive approach to addressing trade differences, recognizing the importance of the broader China-EU relationship and the difficulties currently facing the European economy.
The two sides have established a trade and investment consultation mechanism, and at its second meeting in Beijing in October, they reached 16 points of consensus covering trade and investment, export controls, intellectual property rights and WTO reform.
These outcomes demonstrate that China and the EU can address disagreements through dialogue and practical cooperation rather than confrontation.
They also reflect China's willingness to work with the EU to create a more balanced economic relationship while safeguarding the legitimate interests of both sides.
Ultimately, the China-EU economic relationship is built on complementary strengths and mutual benefits. Europe's advanced technologies, high-quality products and sophisticated services have long found markets in China, just as Chinese manufacturing has supplied European businesses and consumers with competitively priced goods.
The task now is not to dismantle those connections but to strengthen them through greater openness, fair competition and mutually beneficial cooperation.
The EU should value the progress already achieved through bilateral consultations, address its own structural economic problems and work with China to resolve trade differences through dialogue.
A more balanced relationship cannot be achieved by treating one side's competitiveness as a threat while celebrating the other's as an achievement.
If Brussels genuinely wants China-EU trade to become more balanced and sustainable, it must abandon its double standards and work with Beijing to move economic relations toward greater balance, stronger cooperation and shared prosperity.
The author is an observer of international affairs.
The views do not necessarily represent those of China Daily.
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