China opposes Germany-France 'trade defense' proposal... “Protectionism cannot increase competitiveness”

Ahead of the EU trade chief's visit to China, the Ministry of Commerce and the Ministry of Foreign Affairs keep in check

(Beijing = Yonhap News) Correspondent Jong-gu Han = When Germany and France, the two major pillars of the European Union (EU), proposed introducing new trade defense measures to respond to market distortions, China objected, saying that protectionism cannot increase competitiveness.

Ahead of the EU trade chief's visit to China for the second round of economic and trade talks between China and the EU, the war of nerves between the two sides appears to be intensifying.

According to China's Ministry of Commerce on the 7th, a spokesperson for the Ministry of Commerce said on its website the previous day regarding Germany and France's position on this proposal, saying, "Decoupling and severing supply chains only harm others and are not beneficial to oneself."

He added, “The EU should not encourage the careless use of protectionist measures or politicize and securitize economic and trade issues,” adding, “We must avoid going down the wrong path and ultimately causing harm to ourselves.”

On the same day, Chinese Foreign Ministry spokesperson Guo Jiaqun also emphasized that "the industrial and supply chains of China and the EU are deeply integrated and dependent on each other, and the essence of the economic and trade relationship between the two sides is mutual benefit and common prosperity," and expressed the position that each other's concerns should be resolved through dialogue and negotiations.

Previously, German Chancellor Friedrich Merz and French President Emmanuel Macron pointed out the weaponization of trade and market distortion in some countries in a joint letter to European Commission President Ursula von der Leyen on the 5th (local time) and said that new measures that go beyond existing trade defense measures are urgently needed.

The two leaders argued that existing trade defense tools should be used more quickly and that the European Commission should be given new tools to restrict or, if necessary, block access to the EU's single market by countries engaging in unfair trade practices.

Although no specific country was specified, the proposal is interpreted as targeting China, which has a growing trade imbalance with the EU.

The EU has criticized that the competitiveness of regional industries such as automobiles and chemicals is being undermined by the influx of low-priced products due to China's industrial subsidies and overproduction.

Meanwhile, Maroš Ševčovic, EU Commissioner for Trade and Economic Security, will hold the second China-EU economic and trade consultation with Chinese Commerce Minister Wang Wentao in Beijing on the 8th and 9th.

The two sides held their first meeting in Brussels last June and agreed to conduct consultations in four areas, including trade and investment balance, export controls, intellectual property rights, and WTO reform, and also agreed to create a joint monitoring system to monitor trade flows.

At this meeting, the EU is expected to focus on raising issues such as the expansion of the trade deficit with China, the rapid increase in exports of Chinese products, restrictions on European companies' access to the Chinese market, and export controls on key materials such as rare earth elements.