China-EU trade relations seek common ground amid uncertainties

This photo taken on Dec. 3, 2024 shows the 100,000th China-Europe freight train at Duisburg Intermodal Terminal (DIT) in Duisburg, Germany. (Xinhua/Du Zheyu)

Despite increasing challenges, trade between China and the EU demonstrated its resilience in 2024.

by Xinhua writers Zhang Zhaoqing, Kang Yi

BRUSSELS, Dec. 10 (Xinhua) -- For much of 2024, electric vehicle (EV) disputes have weighed heavily on the economic and trade ties between China and the European Union (EU).

The "love-hate" relationship, marked by both friction and interdependence, has left the two powers navigating a precarious path -- seeking common ground even as uncertainty looms.

UNCERTAINTIES CLOUD COOPERATION

What started as an EU investigation in late 2023 spiraled into a year-long clash with additional tariffs imposed by the EU on Chinese-made EVs. However, with negotiations still ongoing, it is clear that neither side is ready to give up on finding a way forward.

People visit the booth of BYD at the Automechanika in Frankfurt, Germany, Sept. 11, 2024. (Xinhua/Zhang Fan)

Chinese car manufacturers once viewed Europe as an open and promising market. The EU's "non-market" measures are eroding their trust and confidence.

A report published Monday by the China Chamber of Commerce to the EU (CCCEU), in partnership with global consultancy Roland Berger, paints a sobering picture of strained ties and growing unease among Chinese businesses operating in the bloc.

The report, based on a four-month survey and in-depth interviews with around 200 Chinese businesses in the EU, underscores that "uncertainty" has become a defining factor for Chinese enterprises operating in the EU.

Chinese businesses have expressed concerns about the growing politicization of commercial sectors and urged the EU to create a fair, transparent, and predictable market environment for foreign enterprises, the report says.

Meanwhile, Brussels-based economic think tank Bruegel has said in a different report that the EU's punitive tariffs on Chinese battery electric vehicles are a mistake, which will do more harm than good.

Trade disputes also tend to have spill-over effects, it said, and such disputes between the EU and China will strain overall bilateral relations.

This file photo taken on June 6, 2024 shows an electric car at a charging station near the European Commission building in Brussels, Belgium. (Xinhua/Zhao Dingzhe)

High tariffs on Chinese EVs are harmful to the future of the European economy, Croatian analyst Mladen Plese said in an interview with Xinhua in September. Europe should be ready for healthy competition with China, and must not follow the United States' lead when it comes to tariffs on EVs, he said, adding, "It is in the interests of everyone in Europe to cooperate with China."

Beyond the EV sector, other industries critical to Europe's green transition such as battery manufacturing, solar panels, wind turbines, and hydrogen technology, have also faced various challenges from the EU.

The economic relationship between China and Europe is indeed facing new challenges, Denis Depoux, global managing director at Roland Berger said, noting that the EU's complex positioning of China forces businesses to navigate an unpredictable and delicate balance.

CONTINUED ECONOMIC RESILIENCE

Despite increasing challenges, trade between China and the EU demonstrated its resilience in 2024.

China's foreign trade with the EU amounted to 4.18 trillion yuan (576.5 billion U.S. dollars) in the first three quarters of 2024, up 0.9 percent year-on-year, statistics show. According to data from the CCCEU, since 2024, the average daily bilateral trade volume has surpassed 2 billion euros (2.1 billion U.S. dollars).

This aerial drone photo taken on Dec. 10, 2024 shows a container terminal of Lianyungang Port, east China's Jiangsu Province. (Photo by Wang Chun/Xinhua)

The China-Europe freight train service characterizes this resilience. As of July 10, China-Europe freight train trips in 2024 had surpassed 10,000, reaching this number 19 days earlier than last year. The freight train service's network currently reaches 224 cities in 25 European countries.

Moreover, by Nov. 15, cumulative China-Europe freight train trips had surpassed 100,000 since its inception 13 years ago, underscoring the enduring strength of this economic link between the two sides.

"Despite disruptions from geopolitical dynamics, economic fluctuations ... China-EU bilateral ties and economic and trade cooperation continue to demonstrate remarkable resilience, immense potential, and vibrant vitality amidst turbulent times," said CCCEU Chairman Liu Jiandong.

Chinese investments in the EU remained a spotlight. More than 2,800 Chinese enterprises operate across Europe, employing over 270,000 local workers, according to CCCEU data.

Chinese battery giant CATL and renewable energy firm Envision Energy have established factories in European countries like Germany, Hungary, and France, bolstering local clean energy infrastructure.

Jason Chen (C), general manager of CATL Europe Operations, speaks at a press conference in Debrecen, Hungary, on Nov. 20, 2024. China's leading battery maker, Contemporary Amperex Technology Co., Ltd. (CATL), announced that it will start producing battery cells at its new facility in Hungary's second-largest city Debrecen next year. (Photo by Attila Volgyi/Xinhua)

According to a survey released by the German Chamber of Commerce in China, a significant majority of German companies plan to maintain their operations in China, with many intending to increase investment within the next two years.

The Business Confidence Survey Report for 2024/25, conducted between Sept. 3 and Oct. 8 with 546 member companies, revealed that 92 percent of German firms intend to continue their operations in the country. Despite market challenges, only 0.4 percent are considering an exit.

Clas Neumann, chairperson of the board of the German Chamber of Commerce in east China, said, "German companies are addressing current market challenges and mitigating risks while positioning themselves to take advantage of the opportunities at hand."

More than 5,000 German enterprises have taken root in China, and the Chinese market is of great significance to them, said Maximilian Butek, chief representative of the Delegation of German Industry and Commerce Shanghai.

This photo taken on Dec. 9, 2024 shows a copy of the Chinese version of a report released by China Chamber of Commerce to the EU (CCCEU) and global consultancy Roland Berger in Brussels, Belgium. Chinese businesses in the EU have called for a fair, transparent and predictable market environment amid growing concerns over a deteriorating business climate in the bloc, according to a report released on Monday by the CCCEU and global consultancy Roland Berger. (Xinhua/Zhao Dingzhe)

LOOKING FORWARD TO ENHANCED COLLABORATION

China-EU relations are strategically significant and hold broad development prospects. China is the world's largest developing economy, and the EU is the largest union of developed countries. China-EU cooperation has served as a stabilizer for a long time in a turbulent world, injecting many certainties into the global system.

The two sides also have deeply integrated industrial and supply chains. As Cai Run, head of the Chinese Mission to the EU, said at an EU-China Forum held last month in Brussels, the EU and China should position themselves as partners rather than rivals. They should strengthen pragmatic cooperation instead of pursuing "decoupling," and work together to bring greater stability and certainty to the world rather than adding complexity.

Despite challenges, there are reasons for optimism as 2025 approaches. Next year's 50th anniversary of China-EU diplomatic ties is an important node of connecting the past with the future, an opportunity to boost mutually beneficial cooperation.

As 2024 draws to a close, the challenge now for the two sides is to find a way forward together. ■