“We’re talking about losing significant parts of the automotive sector and its supply chains, pressure on machine tools, chemicals, the wind industry in Europe that could be wiped out in the next couple of years. I think there’s just more and more concern about the fact that in all of these sectors, China is moving into a dominant or even monopolistic position,” says Andrew Small, director of the Asia programme at the European Council of Foreign Relations (ECFR) in Berlin.
Some in Brussels thought Trump’s return to the White House could help to facilitate a reset in the EU-China relationship. But while Europe’s reliance on the US for security meant that the EU had to roll over when Trump threatened tariffs, China refused to bend, and its tough strategy has so far been successful.
“I think what became clear from the Chinese end was that the view would rather be that Europe is in a weaker position as a result of the situation in the transatlantic ties, and Europe needs to be the one to give things up. That’s what we’ve seen pretty much since then,” says Small.
China’s dominant position in some manufacturing sectors offers leverage of its own, as the Dutch government discovered last September when it seized control of Nexperia, a Chinese-owned chip manufacturer. Beijing retaliated by blocking exports of Nexperia chips
There is only so much that can be externally produced.
EU needs to grow a pair and quit whinning and start moving. Change internal market laws. Subsidize industry to foster development. Review taxation (make taxes higher, not lower, for profits). Establish hard ecological and sustainability policies and enforce them.
Enough about what others have done. Think about everything still needing to be done.
The issue is that China has few viable markets for export left. They are in a trade war with the US, which has 25% of global nominal GDP, they themself have 16%. China has had military issues with Japan and India two massive trade blocks 3.5% of the global economy each. If you add to that the countries they have pissed of in the South China Sea you probably get to another 10% with good reasons to not allow Chinese products.
Given how much China exports, the EU is an incredibly important market with 18% of the global economy. It is also why Trump is such an idiot to piss of the EU. This could break China.
As it sits, in my view, what we consider the markets are to change radically in a very short timetable.
China does have an impressive industrial base but they are not stupid and they understand they need to secure some degree trust with the EU.
That was why they raised little to no opposition when the EU set tariffs to import EVs and simply opted to install factories on the ground. They create jobs and give a spit shine to their image that way.
However, if the EU knows how to play their cards, they can boil the frog and simply put higher demands for the internal market, all products.
Again, China is not a stupid country and they tend to copy or near directly implement EU directives, to ensure we have little to nothing to complain about. Considering they can get free (read slave) labour to make whatever they want, they can afford losing on one side to gain on the other.
That is why the EU passed CBAM and the supply chain laws. If the EU can force China not to use slave workers, then it quickly changes the market.
Wasn’t aware of that. Thank you.
I’m not sure whether I got that right. China has been opening up factories in Europe, so far I agree, but that has little impact on the job market in Europe as the Chinese companies bring their own workers. We see this, for example, in Spain (CATL), Hungary (BYD), in the Balkans (Norinco, a Chinese state-owned military supplier that built solar projects there, among others) as well as in other parts of the globe. There are only of few local workers at Chinese foreign subsidiaries, while the most come from China. Also, illegal workers and forced labour is widespread in this setting (recent examples are Italy’s fashion industry or Chinese carmaker BYD’s closure of its Brazilian plant amid accusations of ‘slave-like’ labour conditions).
And these are only a few examples.
Some talk of chinese companies setting foot in my country has been heard (Portugal) and one of the demands was to have local employement created, not have foreign labour be brought in. Besides, we may be a mess of a country but labour law is quiet harsh here and enforced. I’m not saying shenanigans don’t happen and won’t be made but things get spotted here. And if the whole idea of China is to bring hands from the mainland, that can’t be allowed.