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European Commissioner Maroš Šefčovič is heading to China as the country’s companies come under the EU’s investigatory lens. But with a trade war with the United States intensifying, what’s he after in a rapprochement between the EU and China?
ADVERTISEMENTFor the first time since taking office, EU Trade Commissioner Maroš Šefčovič will travel to China on 27 and 28 March to meet China’s vice premier He Lifeng, Minister for Customs Sun Meijun and Minister of Commerce Wang Wentao. Maroš Šefčovič’s visit to the Asian giant, against a backdrop of tense trade negotiations with the Americans, will be closely scrutinised. Here are five things he’s looking to achieve from his trip to China.1.Send a signal to Washington“The EU wants to signal that the harder they hit, the more they could push the Europeans closer to China,” Victor Crochet, a China expert with law firm Nishimura & Asahi told Euronews. With the US imposing tariffs on aluminium and steel, and further tranche of reciprocal tariffs schedules to begin applying on 2 April, the EU may seek closer ties with China, the second-largest economy in the world after the US.This could be good news for the Asian giant, which is also affected by US tariffs. “China is the one which needs the EU most because of its trade surplus vis-a-vis the EU. However, it will not show it because the EU is also in a complicated situation due to the US,” according to Alicia García Herrero, expert from the Bruegel think tank.2. Re-open diplomatic dialogueThe previous Commission left relations with China strained following a row over Chinese electric vehicles (EVs) culminated in the EU imposing 35% tariffs on Chinese imports, and China retaliating with tariffs on European brandy and Cognac. Since Covid, the EU has also been working on reducing its dependencies on China, notably on critical raw materials.The new strategy is to “derisk through diplomacy”, according to Maria Martin-Prat, the Commission’s Deputy Director-General for Trade. “We want to base our relationship with China on a combination of engagement but also protection,” the EU official told an event in Brussels ahead of Šefčovič’s trip. “We have left behind any idea of a smooth and equal relationship,” she acknowledged on market distortion and subsidisation. Herrero said that Šefčovič will explore options arising from poor relations between the EU and US, but will also arrive with a portfolio EU investigations over unfair trade practices with which to warn China.3. Push China to act on its overcapacitiesChinese overcapacities are Europe’s nightmare. “China is doing nothing to address it,” Maria Martin-Prat claimed. And with US tariffs on Chinese products, there is a risk of seeing China divert more production towards the European market.Steel, cement and wood are among key exports from China to the US which could be redirected to European markets amid the current tariff storm. “Chinese demand for these products has fallen as a result of the halt in property construction,” according to Victor Crochet. Computers, EV’s and renewables, such as solar panels or wind turbines, are also on the list of Chinese overcapacities.“To address overcapacities, the EU wants China to pass from a model based on business subsidies and exports, to a model based on its domestic market,” Crochet added.4. Lift barriers to European companiesEuropean companies gripe over barriers to doing business in China, with data transfers from European companies based in China to their overseas branches requiring a green light from the Cyberspace Administration of China (CAC). A temporary arrangement was found in 2023 between the EU and China to speed up the approval process, but as Herrero pointed out, “this is a major issue for European companies producing a lot of data whether it is financial or related to services.”5. Attract more Chinese investmentThe EU wants to attract Chinese investments. “Europe is in a strong position here,” Sacha Courtial, expert from the Delors Institute told Euronews, explaining: “We’re opening up our market on our terms, i.e. to create jobs in Europe and ask for technology transfers. That’s the idea behind manufacturing of Chinese electric cars in Europe.”Having already opened in Hungary, Chinese electric vehicle giant BYD is considering opening a manufacturing and assembling plant in Western Europe to avoid EU tariffs.
