(Deutsche Welle Chinese website) "Frankfurter Allgemeine Zeitung" commented that the atmosphere of the ongoing EU-China trade negotiations in Beijing will not be easy, because this time EU Trade Commissioner Maros Sefcovic has brought "heavy weapons." Once the German-French proposal is passed, the EU will have an "economic nuclear bomb" that can exclude specific countries from the EU common market if necessary. The commentary titled "EU-China Negotiations: Tough Position, Lack of Confidence" reads:
"To describe China's current trade relations with other parts of the world as tense is obviously an understatement: China's cheap products are looting the global market. The subsidies provided by the Chinese government for these goods account for about 4.4% of China's gross national product. As our columnist Landwehr said As described, these products are produced by an exploited industrial army of about 300 million people. Faced with such product prices, no democratic country can compete with it. In July this year, the EU’s trade deficit with China increased to 36 billion euros, which is equivalent to more than one billion euros every day.
At the same time, Beijing has been halting and allowing exports of raw materials critical to survival at will. Once the supply of such raw materials is cut off, Western production will immediately come to a standstill. "
A commentary in the Frankfurter Allgemeine Zeitung pointed out that China’s impact on global trade is far more severe than Trump’s tariff policy. Trump’s tariff stick will not last long, but the ‘China shock’ will not disappear in the short to medium term:
"Because in order to alleviate the 'China shock,' China must first solve its own problems: boosting domestic demand, strengthening social security, and cleaning up the real estate market, all of which will take a long time. Sevcovic should be careful about his words and deeds in Beijing and not draw red lines publicly. Otherwise, the EU will have to take action and issue restrictive measures at the October 15th summit. Perhaps the EU's new tough stance will be enough to force Beijing to make concessions, but from Beijing's perspective, they do not have much reason to take such a step.
Displaying deterrent weapons may be one of the ways to gain a foothold in the international market. But another way is to strengthen itself through reform. Most of Draghi's original reform proposals for the EU should have been implemented by the end of next year. But as of the end of July this year, the implementation rate was less than 16%. The upcoming general election in France and the tense internal political situation in Germany have added variables to the EU's reform steps. Beijing is well aware of the EU's difficulties. Therefore, even if Sevcovic has new weapons in his hands, his negotiating situation is not optimistic. "
“Europe is ready to fight back”
"Süddeutsche Zeitung" commented that Merz has finally become tougher on China's trade policy. This is undoubtedly a good thing, but a tough stance alone is not enough to win the competition with China:
"When a trading partner relies on its own political or economic strength to coerce the EU or its single member state, Brussels should have the ability in the future to press the 'nuclear button' and immediately cut off the relevant country's access to the EU's single market. This weapon is very powerful. After all, China cannot abandon Europe as a sales market. If the EU does not want to continue to be ravaged, it should dare to show off this 'Trump trump card' and play it when necessary. It is worth mentioning that the EU should do the same in the face of Trump.
However, when Mertz complained about China's huge trade surplus, it was inevitable that there was some irony. On the international stage, such complaints have been around for a long time, but the target of the complaints was not the People's Republic of China, but the Federal Republic of Germany. For the past two decades, those in power in Berlin have turned a deaf ear to such complaints, hoping that one day they would disappear. Now, the German Chancellor seems to have realized that the strategy of using foreign purchasing power to absorb the country's excess production capacity is not a long-term solution.
That being the case, if a tough line against Beijing is to be effective, the German government will also need to boost German private consumption. The German government also needs to improve the production conditions of enterprises, including lowering tax rates, stabilizing social welfare expenditures, reducing bureaucratic obstacles, etc. Simply tightening the reins on the power game is clearly not enough.
Europe must also face up to the economic challenge from China: while German Chancellor Mertz and French President Macron adopted policy position papers on China, they also hope to relax restrictions on fuel vehicles, rather than wholeheartedly following the global trend of electric vehicles. As long as this situation does not change, no matter how many protective measures the EU introduces, it will inevitably lose to China in the competition. "
