The European Union and China have agreed to strengthen co-operation on climate change following Donald Trump’s withdrawal of the United States from the Paris Agreement.
But a one-day summit in Beijing failed to resolve differences over trade imbalances and Russia’s war against Ukraine.
In a joint statement on climate, the two sides said they would enhance bilateral co-operation in such areas as energy transition, adaptation, methane emissions management and control, carbon markets and green and low-carbon technologies.
Affirming their commitment to the United Nations Framework Convention on Climate Change and the Paris Agreement, they said that “green is the defining colour of China-EU co-operation”.
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Before the start of the summit, Xi Jinping told European Council president António Costa and European Commission president Ursula von der Leyen that the EU and China should handle their differences “properly”.
And he rejected the EU’s assertion that China’s industrial policy had created an overcapacity in some sectors such as electric vehicles which threatened European competitiveness.
“We hope that the European side will keep the trade and investment markets open, refrain from using restrictive economic and trade instruments, and provide a good business environment for Chinese enterprises to invest and operate in Europe,” he said, according to Xinhua news agency.
The summit itself, where the Chinese delegation was led by premier Li Qiang, was dominated by the trade relationship between the EU and China, which von der Leyen said had reached an inflection point.
Speaking to reporters after the meeting, she said the EU’s trade deficit with China had doubled in the past decade and had now reached €300 billion.
“As we said to the Chinese leadership, for trade to remain mutually beneficial, it must become more balanced. Europe welcomes competition, we like competition, but competition has to be fair,” she said.
The EU raised three trade issues with China: better access for European firms to the Chinese market; overcapacity in some Chinese industrial sectors; and export controls on rare earths and related magnets. They agreed to work on reciprocal arrangements for public procurement contracts and China agreed to fast-track applications from European companies for rare earths export licences.
Von der Leyen said the two sides discussed the issue of overcapacity at length, with the EU side complaining that China was producing too many subsidised goods for its own market to absorb and that these products were going to other markets.
“But the more other markets restrict Chinese exports, the greater the risk of trade diversion and pressure on the European Union’s single market. And this puts our own industrial competitiveness at risk at a time when we are making significant investments – for example, in clean energy transition,” she said.
“The Chinese leadership has started to look into this issue under the term involution and expressed willingness to support more the consumption and less the production part. This is important. We need to see progress on this issue because without progress, it would be very difficult for the European Union to maintain its current level of openness.”
The two sides also discussed the war in Ukraine and the EU urged China to use its influence over Vladimir Putin to encourage him to agree to an unconditional ceasefire and to enter into meaningful peace negotiations. The EU last week targeted two Chinese banks for helping to circumvent EU sanctions against Russia, and Costa said they had spoken about the danger of dual-use products exported from China being used in Russia’s war effort.
