EU members split sharply over measures to de-risk China economic ties
- France leads states eager to protect industries from any unfair competition by Beijing while Germany and other free-traders say the market can handle it
- A focus remains EU inquiry into Beijing’s subsidies for electric vehicle manufacturers, with decision likely delayed until after European Parliament elections
Battle lines are being drawn in Brussels on trade, with the EU’s plans to securitise its economic ties with China thrilling some of its members and enraging others.
On one side of the divide: a group of countries led by France, which champion hardcore industrial policy and robust tools to protect their industries from unfair competition, and equip them with the tools and money to compete.
On the other: a group of free-traders led by Germany, who prefer to let the market set the rules of competition with China and other powers – even if not everyone is playing by the same terms.
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How do France’s ambitions as a global leader figure in China-US relations?
Ground zero is an EU investigation into subsidies in China’s electric vehicle sector, a lightning rod for some of the bloc’s deepest cleavages over the nature of the EU economy, and by extension its relationship with Beijing.
Paris has championed the probe, which it views as part of an effort to build a third and European pillar between the US and China, one that fights fire with fire in a multipolar world.
“China is our economic partner, but China has industrial overcapacity. And the G7 must present a united front to protect its industrial interests,” French finance minister Bruno Le Maire said this week, in a rallying call for Group of 7 nations to steel their joint economic defences against Beijing.
Speaking in Brussels on Thursday, Finland’s trade minister, Ville Tavio, threw his support behind the investigation.