EU Parliament ready to take tougher line on China, says lead MEP

Por Carlo Martuscelli, Jordyn Dahl — China – POLITICO

BRUSSELS — A cross-party consensus is growing in the European Parliament on the need for the EU to take a harder line on China, senior MEP Pascal Canfin told POLITICO.

Canfin, the European Parliament’s point person, or rapporteur, on the trade relationship with China, was scathing in his assessment of the threat posed by Beijing’s surging exports.

“The whole purpose of Chinese policy is to be the leader of the new global order based on their own power, their own values and the dictatorship of the Communist Party,” the French liberal said in an interview.

Brussels and Beijing are locked in negotiations over ways to rebalance the bloc’s €1 billion-a-day trade deficit with China. A surge in Chinese exports has put pressure on domestic producers, stoking fears that the continent is deindustrializing amid high-profile factory closures across the automotive and chemical sectors. 

EU Trade Commissioner Maroš Šefčovič is set to visit Beijing in October as part of the talks. He has said that the bloc stands ready to act if progress is not made by that date.

The Commission is considering measures to counter China’s industrial dominance, including new rules to encourage companies to diversify their critical supply chains, as well as safeguards that would limit imports of key goods, like hybrid electric vehicles.

In a joint statement on Thursday, the Parliament’s Foreign Affairs Committee threw its weight behind curbing Chinese exports and Europe’s overreliance on everything from raw materials to semiconductors, calling for the EU to take action to curb the “weaponization of EU economic overreliance.”

Business as usual no more

Canfin said there was a growing realization among EU lawmakers that business as usual is no longer an option when it comes to the bloc’s relationship with Beijing. He pointed to growing support in the Parliament for a more aggressive industrial policy as evidence of shifting attitudes toward China.

Lawmakers are working out their position on the proposed Industrial Accelerator Act, which seeks to enshrine a European preference over strategic industrial sectors in green public procurement. The lead lawmakers on the flagship industry bill want a tightly knit “Made in Europe” club and more stringent screening of foreign direct investments.

The policy is widely understood to be a response to China, and a bid to shore up the continent’s industrial base. 

Canfin said that, while major political groups were split on China, a more hawkish consensus was taking hold. The position was attracting support across the political spectrum, including from the far left and far right.

“I’m not saying that it’s a done deal, but I think we can really win this battle within the parliament,” he added. 

Canfin warned that national leaders, not the Parliament, were more likely to take a cautious approach. EU governments are trying to water down parts of the Industrial Accelerator Act, for example, seeking to open up its Made in Europe provisions on a product-by-product basis to countries that have free-trade or procurement deals with the EU.

He observed, however, that Germany, the bloc’s largest economy, was increasingly coming round to a tougher line, also thanks to growing support in the country’s Mittelstand, made up largely of small and medium-sized businesses, even as major corporate players remain invested in China. 

“The German government has always considered that what’s good for BMW, BASF, and Mercedes is good for everybody,” Canfin said. “Today, that could be challenged.”

Any action from Berlin — which has historically favored closer trade ties with China — hinges on the strength of Chancellor Friedrich Merz’s coalition. The chancellor is under pressure after the far-right Alternative for Germany won a landslide election victory last week in the eastern state of Saxony-Anhalt.

With Merz’s grip on power weakening, China is likely to slide down Berlin’s list of priorities, said Jörg Wuttke, a longtime China watcher who advised Merz ahead of his first visit to Beijing in February. 

The more concerning question is how seriously to take Merz’s recent calls for firmer trade action and protection of European industries. In a July press conference with French President Emmanuel Macron, the German chancellor said China’s trade surplus was costing Europe jobs and declared that he was “not prepared to accept the status quo.”

Successive governments have taken a cautious line on China, wary of provoking retaliation against German businesses there. Merz’s strong words, Wuttke said, were aimed at a domestic audience ahead of the Saxony-Anhalt election. 

Fonte: China – POLITICO