N. Peter Kramer’s Weekly Column
Last week EU leaders put their heads together in Brussels to see how they can make a fist against China. After all, unfair Chinese competition threatens to wipe EU industry of the map. Some sectors have already been hit hard by the tidal wave of cheap imports from China, often richly subsidised by the regime of President Xi-Jinpeng.
There is certainly no shortage of alarm signals to urge the EU to hurry. In September, China’s exports recorded the fastest growth since 2022, going up 36 percent from last year. In the first nine months of this year, the country recorded a trade surplus of $938 billion, well on its way to smashing the record of last year, $1200 billion.
The growth engine of the Chinese economy continues to run on exports. Beijing had the ambition for a new economic model in which domestic consumption would be the pillar. However a protracted real estate crisis dealt a blow to confidence. The IMF and the G20 recently called on China to urgently end its fixation on exports as growth model.
The EU is trying to stem the Chinese influx with import duties and anti-dumping measures. For a long time, the EU member states were not on the same page. Germany in particular put the break on a tough approach, because it did not want to jeopardise its interests in China. But in the meantime, German industry is bleeding so hard that Berlin has given up its resistance.
The unanimity in the Council resulted in a breakthrough . European Commissioner for Trade, Maros Sefcovic, reported that Beijing has promised to cut back on the export of hybrid cars. If that agreement holds, it will be a signal that the EU is not completely powerless. The next question is, are the EU leaders able to agree on practical measures to revitalise their own industry.
