Latest news with #Sino-European
Telegraph
6 days ago
- Business
- Telegraph
Europe faces an economic war on two fronts
China's charm offensive in Europe did not last long. Xi Jinping has abandoned all pretence of a combined Sino-European front to defend world trade against Donald Trump. It would be more accurate to say that he has joined the kill, sharpening his tools of coercion and activating China's rare-earth weapon against Europe just as aggressively as he has against his American nemesis. 'It was never that charming in the first place,' said Andrew Small, from the German Marshall Fund in Berlin. 'They were slightly more civil for a bit, but now almost everybody in Europe recognises that there isn't going to be any rapprochement. China has made that absolutely clear,' he said. Mr Small said China has seized on the transatlantic rift to hit Europe while it is down, much as it did to Canada at the low point of US-Canada relations. 'Beijing treats this simply as a moment of vulnerability to exploit,' he said. The slimmed down EU-China summit this week marks a 50-year nadir in bilateral relations, a charade of wooden smiles and gritted teeth. 'We have not always seen eye to eye,' was the warmest that Antonio Costa, the European council president, could come up with. Europe now finds itself in an economic war on two fronts at once. The Trump ordeal is the lesser of the two. American tariffs on EU goods look likely to settle at 15pc, with a few carve-outs but also prohibitive tariffs on steel, aluminium, and (later) pharma. Such a level is not as harmless as euphoric markets seem to imply. Citigroup's Giada Giani said the eurozone's growth spurt earlier this year was an illusion of 'tariff frontloading'. She expects zero growth for the next three quarters. It would not take much to push Europe into outright recession. But the much greater long-term danger comes from the massive and systemic dumping of Chinese excess capacity on European markets. China's trade surplus with the EU hit €305bn (£265bn) last year. The monthly data shows that it is on an exploding trajectory this year. Europe is suffering the brunt of the China shock 2.0. The first China shock in the 1990s and early 2000s flooded the world with cheap goods and convulsed the global economy. It led to deflation, ultra-low interest rates, and debt bubbles. It rendered finance too proud and caused the worst inequality in a century. Free capital flows and a globalised workforce allowed the owners of capital to exploit labour arbitrage, playing off Chinese wages against wages in the West. The politics were, and still are, toxic. Goldman Sachs says the China shock 1.0 peaked at 0.6pc of global GDP in 2008. That was enough to destabilise our democracies. It is heading for 1pc this year as China remains mired in a post-bubble deflationary slump and as Chinese companies seek foreign markets to stay afloat. 'The China shock 2.0 is even worse than the first one. It is going to be slow torture for Europe,' said George Magnus, from Oxford University's China Centre. The US political class has concluded that the trading relationship is unworkable on current terms and has taken drastic action to defend America. The EU has allowed itself to become the market of last resort by default. The French grumble that German companies made a Faustian pact with China and long ago hijacked EU policy in their own interests. 'The Europeans are at last getting this, and there's been a shift even in Germany because the shock is really hitting home,' said Mr Magnus. 'It's reached a point where it threatens to destroy Europe's industrial capacity and know-how. It would be utterly myopic to ignore this for the sake of cheaper consumer goods,' he said. Europe has imposed calibrated tariffs on Chinese electric vehicles and launched 18 trade defence measures of various kinds, but this ponderous pedantry is overwhelmed by larger forces. China has been suppressing the yuan via two disguised mechanisms: wage deflation and by linking the yuan to a weakening US dollar. The combined effect has been a depreciation of China's 'real effective exchange rate' against the euro of almost 30pc since 2022. We can argue over whether or not this is currency manipulation. Brad Setser, from the US Council on Foreign Relations, says Beijing is intervening surreptitiously and on a huge scale through the offshore dollar holdings of the state-owned banks. Of course, China would slide into even deeper deflation if it revalued, but that only goes to show that the 'Leninist-capitalist' model of the Communist Party cannot coexist with the world's open trading system. One or the other has to go. China's export surge is not happening because its products are better or because its economic model is more competitive. It is the result of a system that favours chronic over-investment, with warped incentives that defy market price signals. Policy is geared to the state-owned behemoths and honed to ensure absolute party control. The whole structure crushes consumption. It is why Chinese households enjoy just 37pc of GDP, compared to 51pc in Germany, 62pc in the UK, and 68pc in the US. It is why China produces 32pc of the world's manufacturing goods but accounts for 13pc of world consumption. The rest of us have to absorb this surplus. Chinese economists have been calling for deep change to boost welfare spending and move to a modern consumption economy, if only in China's own self-interest. That is how you get out of a deflation trap. Xi Jinping will have none of it. Welfarism leads to 'lazy people' and wastes money needed for the techno-military Cold War against the West, and to sustain the national security state. 'Once welfare benefits go up, they never come down,' he says. The evidence of the last year, from the third plenum onwards, is that China is doubling down on its deformed model of industrial over-capacity. This is what Europe is facing. Any attempt to defend itself is met by Xi's coercive use of China's rare earth monopoly and its hold over critical choke points in the global supply chain. At the same time, any attempt by Europe to defend itself against Donald Trump's tariff shakedown is met by veiled threats to throw Ukraine to the wolves, or to let gas-short Europe freeze in winter. Europe is learning what it means to have no leverage in a Hobbesian world of lawless bruisers. But for all of Trump's pyrotechnics, China poses by far the greater menace. Charles Parton from Germany's Mercator Institute says the Communist Party sees diplomacy as a zero-sum 'struggle against hostile forces'. Leaked internal documents leave no doubt that the Politburo thinks it is in an ideological knife-fight against liberal democratic values, economic freedoms, and the pluralist society. 'These elements add up to a geopolitical war. Many third countries fail to recognise this reality,' he said. Europe has long been among the blind. The dependency now runs so deep that the EU cannot extract itself without serious damage. Its belated and half-hearted policy of 'de-risking' has failed from top to bottom. Markets are talking up a European economic renaissance over the next three years. It is a bet on Nato rearmament and military-Keynesian growth. I can see the logic but there must be a very high risk that Europe will disappoint yet again and slip deeper into its second lost decade. The tragedy for the West is that it stands divided in the critical civilisational battle of our time. Donald Trump is single-handedly to blame for this. He really is Xi Jinping's useful idiot.
American Military News
23-07-2025
- Business
- American Military News
Tensions High As EU Leaders Head To China For Pivotal Summit
This article was originally published by Radio Free Europe/Radio Liberty and is reprinted with permission. European Commission President Ursula von der Leyen and European Council President Antonio Costa will meet with the Chinese president and prime minister in Beijing on July 24 in what is expected to be a tense EU-China summit with the war in Ukraine and a potential transatlantic trade war looming large in the background. Brussels will raise the usual concerns about human rights in Tibet, Xinjiang, and Hong Kong with Beijing expected to quickly bat away any form of criticism. Instead, the most heated discussions will likely center around China's support for Russia's war in Ukraine and what the EU views as unfair Chinese trade practices, which have led to a ballooning deficit in Sino-European trade in favor of Beijing. Briefing the media before the summit, European Union officials underlined that the EU presidents are expected to be 'direct, open and constructive' but are also 'ready to defend our interest.' 50 Years Of Diplomatic Ties The summit was meant to celebrate 50 years of diplomatic relations between China and the bloc, but don't expect too many niceties or concrete deliverables of any kind. Given that both sides are keen to showcase their green credentials, there were hopes in the EU that they would at least agree on a common declaration on the climate, but it is very uncertain if even this will materialize. This stands in sharp contrast to the EU-Japan summit held the day before in Tokyo, where a 24-page declaration covering a broad policy agenda was expected, including progress on bilateral security ties and a rare earths deal. The key meeting to look out for in Beijing is the morning session, when von der Leyen and Costa will have a 'geo-strategic' discussion with Chinese President Xi Jinping. Have The Gloves Come Off Regarding Ukraine? Ukraine will take up a big part of the meeting, which comes just a few weeks after Chinese Foreign Minister Wang Yi told European diplomats in Brussels that his country could not accept a Russian defeat in the war. Brussels has long sought not to antagonize China too much on the issue, but the gloves appear to have come off, at least to a certain extent. EU officials now say openly that 80 percent of dual-use items used by Russia in its war effort originate from China. Brussels has also criticized Beijing's continued export of components like drone engines to Moscow. China has also been targeted — both directly and indirectly — in the latest EU sanctions package on Russia agreed last week. Several Chinese companies and a handful of financial institutions are now blacklisted, with the Chinese Commerce Ministry already criticizing the move. The fact that Brussels now feels confident and can find unanimity to target Beijing in this way is something new. New EU restrictions, such as a ban on refined petroleum products made from Russian crude oil and processed in third countries, are also expected to affect China indirectly. An EU official involved in summit preparations told RFE/RL that no major shift is expected in Beijing's 'no-limits partnership' with Moscow, but Brussels hopes for modest steps, such as tighter customs and financial controls on dual-use goods. Trade Deficit The afternoon discussion with Chinese Prime Minister Li Qiang will focus on the economic relationship and is expected to be equally delicate. The EU and China are each other's second biggest trading partners with trade reaching $2.3 billion daily. But it's the trade deficit that is irking Brussels. Compared to last year, it has doubled to the current $350 billion, with subsidies, procurement barriers, and export controls cited by the EU as real irritants. No major breakthroughs are expected in Beijing, but EU officials hope China might at least acknowledge the concerns and take steps to stimulate domestic demand or address imbalances. Brussels will also hint at possible reciprocal measures, referencing past actions against Chinese electric vehicles and dairy products. But the question is how far the bloc is really ready to go. It does rely on China for critical minerals and permanent magnets — items that are essential for pretty much all modern technologies. And, despite the EU's best efforts to strike new trade deals with the likes of Australia, India and Indonesia to 'de-risk' from China, the shortfall will not be covered immediately. Beijing knows this as well. And then there is the delicate issue of EU-US relations. Unless a deal can be found in the coming days, American tariffs of 30 percent will hit the EU on August 1 with Brussels poised to strike back with countermeasures on US products worth billions in a move that will derail transatlantic trade. One EU diplomat told RFE/RL that this was 'a prospect that has the Chinese rubbing their hands in sheer delight,' as Beijing has long sought to drive a wedge between Brussels and Washington. So, expect China in the next few days to very much push the narrative that it, together with Europe, now represents the rules-based international trade order and that the real distorter of commerce and protectionism isn't to be found in Beijing but in Washington. Depending on what is happening with the transatlantic trade talks, the EU might just be tempted by such rhetoric.
Nikkei Asia
18-06-2025
- Business
- Nikkei Asia
EU companies are 'hostage' to US-China brawl, chamber chief says
BEIJING -- Companies in the European Union are being held "hostage" in China's trade war with the U.S., the head of the bloc's business chamber in Beijing said -- even after the dueling superpowers hammered out a tentative truce. The comments to Nikkei Asia by Jens Eskelund, president of the European Union Chamber of Commerce in China, underscore challenges in improving Sino-European trade relations ahead of a high-profile summit planned for late next month.
Yahoo
05-06-2025
- Business
- Yahoo
Special Seminar Paves the Way for European Dairy Brands to Enter China's Special Food Market Under New Rules
ROTTERDAM, Netherlands, June 05, 2025--(BUSINESS WIRE)--CCIC Europe Food Test Co., Ltd. (CCIC EFT) is stepping up efforts to help more European companies access China's infant formula market. On June 25–26, CCIC EFT will host a targeted seminar in Wageningen, the Netherlands, focused on regulatory updates and market access for producers of infant formula, older infant and toddler milk-based formula, and food for special medical purposes (FSMP). Co-organized with the Technology Innovation Center of Special Food, State Administration of Market Regulation (TISF, SAMR), the seminar is designed for professionals familiar with Chinese regulations and seeking the latest updates on standards, product registration, and market trends. Attendees will benefit from expert-led sessions by senior SAMR technical specialists covering topics like regulatory developments and trends in China's infant formula and FSMP sectors, key differences between Chinese and European regulatory frameworks, and emerging market opportunities and consumer demand in China. In addition to manufacturers, the seminar will be relevant for suppliers of raw materials—such as dairy, base powder, and nutritional fortification products—interested in entering or expanding in the Chinese market. China is among the world's largest markets for infant formula and FSMP, and recent regulatory revisions reflect the government's commitment to higher product quality and consumer safety. Staying informed and compliant is essential for international brands aiming for long-term success in China. According to CCIC EFT, the seminar offers valuable insights into compliance best practices, helping European companies ensure their products align with Chinese standards both now and in the future. As a joint venture laboratory of CCIC in Europe, CCIC EFT specializes in dairy and special dietary food testing, regulatory consulting, and compliance services. Accredited internationally, the company operates a robust Sino-European testing network and plays a vital role in facilitating trade and regulatory alignment between Chinese and European stakeholders in the nutrition sector. For European businesses seeking to navigate China's evolving regulatory landscape, this seminar offers a strategic gateway into one of the world's most dynamic and promising nutrition markets. View source version on Contacts PR Contact:EncycloVision (Shenzhen) Brand Communication Co., ZhouEmail: evisionsinfo@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-06-2025
- Business
- Yahoo
Special Seminar Paves the Way for European Dairy Brands to Enter China's Special Food Market Under New Rules
ROTTERDAM, Netherlands, June 05, 2025--(BUSINESS WIRE)--CCIC Europe Food Test Co., Ltd. (CCIC EFT) is stepping up efforts to help more European companies access China's infant formula market. On June 25–26, CCIC EFT will host a targeted seminar in Wageningen, the Netherlands, focused on regulatory updates and market access for producers of infant formula, older infant and toddler milk-based formula, and food for special medical purposes (FSMP). Co-organized with the Technology Innovation Center of Special Food, State Administration of Market Regulation (TISF, SAMR), the seminar is designed for professionals familiar with Chinese regulations and seeking the latest updates on standards, product registration, and market trends. Attendees will benefit from expert-led sessions by senior SAMR technical specialists covering topics like regulatory developments and trends in China's infant formula and FSMP sectors, key differences between Chinese and European regulatory frameworks, and emerging market opportunities and consumer demand in China. In addition to manufacturers, the seminar will be relevant for suppliers of raw materials—such as dairy, base powder, and nutritional fortification products—interested in entering or expanding in the Chinese market. China is among the world's largest markets for infant formula and FSMP, and recent regulatory revisions reflect the government's commitment to higher product quality and consumer safety. Staying informed and compliant is essential for international brands aiming for long-term success in China. According to CCIC EFT, the seminar offers valuable insights into compliance best practices, helping European companies ensure their products align with Chinese standards both now and in the future. As a joint venture laboratory of CCIC in Europe, CCIC EFT specializes in dairy and special dietary food testing, regulatory consulting, and compliance services. Accredited internationally, the company operates a robust Sino-European testing network and plays a vital role in facilitating trade and regulatory alignment between Chinese and European stakeholders in the nutrition sector. For European businesses seeking to navigate China's evolving regulatory landscape, this seminar offers a strategic gateway into one of the world's most dynamic and promising nutrition markets. View source version on Contacts PR Contact:EncycloVision (Shenzhen) Brand Communication Co., ZhouEmail: evisionsinfo@
