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EU says ready to defend from heavily subsidized Chinese goods flooded Europe

EU says ready to defend from heavily subsidized Chinese goods flooded Europe China's leader Xi Jinping (photo: Getty Images)

The European Union is ready to deploy all available tools to protect its economy if China fails to offer fair access to its markets, states Ursula von der Leyen, President of the European Commission, after talks with Chinese leader Xi Jinping in Paris.

President of the European Commission added that heavily subsidized Chinese goods, such as electric cars and steel, have flooded Europe, and said that the world cannot absorb China's overproduction.

Von der Leyen emphasized this after a meeting on Monday with French President Emmanuel Macron and Xi, who is on a state visit to France.

"For trade to be fair, access to each other’s market also needs to be reciprocal. We discussed how to make real progress on market access. I remain confident that more progress can be achieved. At the same time, we stand ready to make full use of our trade defense instruments if this is necessary," Von der Leyen said.

According to her, the EU can activate the International Procurement Instrument, created in 2022 and first used last month to initiate an investigation into medical device procurement by China. Brussels may ultimately restrict China's access to tenders if reciprocity is lacking.

"Europe cannot accept market-distorting practices that could lead to deindustrialization," Von der Leyen said.

China denies creating excess capacity and accuses the EU of protectionism. Xi confirmed this position during talks with Macron and Von der Leyen, stating that there is no issue of capacity when viewed in terms of comparative advantages or global market demand.

Von der Leyen said she urged the Chinese government to address the issue of structural overcapacity as China continues to massively support its manufacturing sector while domestic demand remains stagnant.

Xi Jinping's visit to Europe

Xi Jinping is making his first working trip to the European Union in five years. He visited France before heading to Serbia and Hungary.

Ursula von der Leyen called on the Chinese leader to use his influence on Russia and its nuclear ambitions.

Criticism of China regarding trade with the EU

In May 2023, German Chancellor Olaf Scholz called on the EU to reduce its dependence on China, accusing the Beijing government of increasingly acting as a rival and competitor rather than a partner.

France has increased pressure on the European Union, demanding measures to counter China's advantages in export sectors such as electric vehicles.