Expert analysis: Three key takeaways from the latest China-EU trade talks

China and the European Union (EU) released a joint statement on Friday outlining a list of 16 agreements, including a reduction in China's electric vehicle exports, increased imports of European medical devices and commitments concerning rare earth exports and intellectual property management – all key issues at the center of trade tensions between the two sides.

After a prolonged period of simmering China-EU trade tensions, the joint statement offered a much-needed easing of tensions, bringing both sides back to dialogue and signaling enhanced cooperation and mutual understanding.

To unpack the joint statement and examine the significance of the consultations, CGTN spoke to Jiang Feng, a research professor at the Shanghai Academy of Global Governance and Area Studies (SAGGAS), dean of the Institute for European Studies and chairman of the SAGGAS Council, who shared three key takeaways from the statement.

Takeaway 1: Both sides demonstrate strong willingness to cooperate and engage in dialogue

Jiang said the joint statement marked an initial success and sent a clear signal: both sides had demonstrated a strong willingness to cooperate and wanted to avoid a trade war.

Words such as "dialogue," "communication" and "cooperation" appear repeatedly in the joint statement, highlighting both sides' willingness to engage with each other in a mutually beneficial manner.

Jiang noted that while both sides have made compromises, the agreements between China and the EU were based on reciprocity and equality.

"While addressing the EU's concerns, China has also raised its own demands, including fair treatment and a favorable business environment for Chinese enterprises operating in Europe, urging the EU to refrain from adopting discriminatory measures against Chinese companies in areas such as public procurement," he noted.

Beyond a step that stabilizes China-EU relations, Jiang also pointed out that constructive consultations carry significance in the greater global context.

"Now that the two sides can sit down and negotiate a resolution to the pressing – and indeed serious – economic and trade issues they face, this not only serves the interests of China and Europe but also sets a good example for countries around the world to resolve bilateral disputes and differences through consultation," Jiang said.

In other words, success in reaching consensus between China and the EU on trade differences through a dialogue mechanism is not just an achievement for both sides but also a win for global economic stability and a rules-based trade order.

Takeaway 2: China is committed to working toward a more balanced trade relationship with the EU

Jiang noted that as a result of the consultations, the EU had secured demands it urgently sought, while China had honored its commitments and addressed major EU concerns.

China has agreed to reduce its exports of new energy vehicles, increase imports of EU medical devices, lower tariffs and address existing market access barriers, reflecting its commitment to more balanced trade relations.

The first major demand comes from Europe's automobile industry, "a key sector for Europe and the area where the EU feels the greatest pressure from China," according to Jiang.

He said that the consensus to control the total volume of Chinese automobile exports to Europe is highly substantive and responds to the biggest demand of the automobile industries in Germany and other European countries.

The second area of concern involves tariffs and rare earth export licensing, where room for adjustment has opened up. According to Jiang, the fast-track mechanism facilitating export licenses for rare earths and permanent magnets supplied to the EU is extremely important for the EU, who had previously expressed an urgent need for progress in this area.

What China demonstrated in the dialogue has been consistent with what it has long claimed: that China is willing to maintain stable bilateral economic and trade ties and make them more balanced with the EU. 

Takeaway 3: China is not the root cause of Europe's problems but a partner in solving them

Wang Wentao, the Chinese minister of commerce who represented China in the consultations, has said that "China is not the source of Europe's problems but a partner in solving them." The message is clear here: trade cooperation between China and the EU will benefit rather than harm both sides.

In recent years, however, perceptions of China as an economic threat have continued to grow in some European countries, referencing a huge trade deficit of €360 billion.

Jiang warned against such characterizations, calling for closer scrutiny of the figures used to support these narratives and cautioning against the ramifications of portraying China as a threat.

While the EU has repeatedly highlighted a trade deficit with China of more than €1 billion ($1.12 billion) per day, Jiang noted that this figure also counted in the substantial volume of goods produced by European companies in China and then sold back to Europe, which are in fact European companies selling to Europe. 

Additionally, Jiang noted that the staggering figure is the EU's goods trade deficit with China and does not account for its substantial surplus of trade in services with China, which leads to a misrepresentation of the overall economic and trade relationship.

Not only does the evidence underpinning the "China threat" narrative appear shaky, the result of spreading the political narrative of China as the cause of Europe's problems can also be damaging.

"Presenting interdependence as damage to European sovereignty and security is a classic case of extreme politicization and securitization of economic and trade issues," Jiang warned. "It will push up trade costs, tear apart industrial chains, erode bilateral trust and ultimately harm the economic well-being of all parties."

Cooperation may, however, bring a very different future. Jiang suggests that China and the EU are both export-oriented economies that have the potential not only to strengthen each other but also to jointly contribute to a more stable global trade order.

Jiang observed that in the joint statement, many of the agreements in the China-EU joint statement are framed within the broader context of the World Trade Organization (WTO). In other words, both sides are deliberately working together to build confidence in and uphold the authority of the WTO's fair-trade principles, which implies a potential for China-EU cooperation to strengthen governance of the global trading order.

"I believe it is important to translate the valuable experience and the approaches used to resolve problems between China and the EU into principles that can promote the governance of the global trading system," Jiang said.