With China, Europe “shot itself in the foot”

With China, Europe “shot itself in the foot”
With China, Europe “shot itself in the foot”

Florence de Changy

Hong Kong

Published on May 7, 2024 at 05:29. / Modified on May 7, 2024 at 06:11.

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In 2022, the trade balance between China and Europe indicated a surplus of 400 billion dollars in favor of the second largest economic power in the world. A year later, this record differential has narrowed somewhat but remains abysmal. In 2023, Chinese industry was responsible for 35% of global production. A level never reached. President Xi Jinping assured Monday in Paris that “the so-called problem of China’s overcapacity does not exist”, while Europeans are alarmed by the influx of massively subsidized Chinese products into their market which would distort international competition. .

To explain the chronic deficit in trade between China and Europe, some suspect the Chinese authorities of applying a carefully planned strategy of saturation, or even suffocation. A plan which would aim to destroy European industry by excessively subsidizing sectors deemed key. China is accused of not managing its excess production capacity, which forces companies to export their surplus at discounted prices. The case of electric cars is the most obvious: China currently produces four times more than its domestic market is capable of absorbing.

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