European companies operating in China have called on the Chinese government to address the issue of industrial overcapacity and intense price competition ahead of critical trade talks scheduled for next month, according to a report released by the EU Chamber of Commerce in China on Tuesday [1]. The report highlights that European governments and businesses are increasingly concerned about the negative impact of a surge in Chinese exports, particularly in sectors such as electric vehicles and green technologies, which are supported by significant state incentives in China [1].
The chamber's report identifies overcapacity as a central challenge, noting that aggressive pricing and competitive pressures from Chinese manufacturers are creating significant difficulties for European industry [1]. Trade data cited in the report shows that Chinese exports soared by 25% in August, and the country's trade surplus reached $800 billion for the year [1]. Despite these headline figures, European companies warn that such growth masks deeper structural problems in the bilateral trade relationship, including fears that European industries are being hollowed out by the influx of Chinese products [1].
The upcoming talks are viewed as a pivotal moment, with European officials seeking concrete commitments from China to address structural imbalances in trade [1]. The EU has emphasized the need for transparent and fair competition, warning that continued overcapacity and price undercutting could further erode the competitiveness of European industries and widen the trade gap [1]. The EU is seeking initial action from China on the trade gap by early October, stressing that meaningful steps are necessary to avoid potential retaliatory measures and restore balance in the trading relationship [1].
The chamber's report underscores the complexity of the negotiations ahead, as both sides face a lengthy list of concerns and the challenge of finding mutually acceptable solutions to longstanding trade issues [1].
CONCLUSION
European companies are urging China to take immediate and concrete steps to address industrial overcapacity and aggressive pricing, warning of significant risks to European competitiveness if the status quo persists. The upcoming trade talks are seen as a critical opportunity for both sides to address these imbalances, with the EU signaling that failure to act could lead to retaliatory measures.