China-EU trade talks rebalance, stabilize relations

The second round of China-EU trade and investment consultations concluded in Beijing last week with a series of understandings and deliverables, offering a counterweight to growing global protectionist pressures, and underscoring both sides' continued engagement to stabilize and balance one of the world's most vital bilateral economic relationships.

After two days of intensive talks co-chaired by Minister of Commerce Wang Wentao and European Commissioner for Trade and Economic Security Maros Sefcovic, the two sides have agreed to maintain stable bilateral economic and trade ties and make them more balanced.

Their joint statement set out 16 specific points of consensus covering trade and investment balance, export controls, intellectual property rights, and World Trade Organization, or WTO, reform.

According to the readout, both sides will continue, within the framework of WTO rules, to explore the possibility of tariff reductions on certain goods.

An understanding has been reached on trade in hybrid vehicles in a WTO-compliant manner.

The two sides, which traded $828.1 billion of goods in 2025, also discussed in depth ways to address each other's concerns on equal footing, expand two-way market access, and promote a dynamic balance in China-EU trade, covering topics including medical devices, cosmetics, pharmaceuticals, inverters, and agri-food products.

To help increase imports of medical devices from the EU, a matchmaking event will be held during the 9th China International Import Expo, which will take place in Shanghai in November.

Despite some doom-and-gloom headlines that preceded the talks, the consultations ended without acrimony and produced a 16-point joint statement that spoke for itself, said Wolfgang Roehr, a former German consul general in Shanghai, who is currently a visiting scholar at the Center for Cultural Studies on Science and Technology in China at the Technical University of Berlin.

"It shows that Brussels and Beijing, if push comes to shove, can overcome differences — even if these are severe — and find a practical compromise," he said. "This inspires hope that both sides can, at present and in the future, agree also on further issues on trade, and indeed, on questions in other areas."

Business responded positively to the Beijing talks, with "relief" the predominant sentiment, said Michael Schumann, chairman of the board at Germany's Federal Association for Economic Development and Foreign Trade.

"What companies need above all is predictability," he said. "Every new headline about a possible trade war delays investment decisions and puts supply chains under additional strain. A negotiated understanding, a clear timetable for further talks, and above all the commitment to keep talking are therefore precisely the signals businesses have been waiting for."

The Ministry of Commerce said China and the EU will hold the third meeting of the consultation mechanism in March, with a ministerial video meeting scheduled for January to maintain communication ahead of the next round of talks.

Qu Hongbin, former chief China economist at HSBC, said jaw-jaw is always better — and cheaper — than war-war, given that the economies of China and the EU are "overwhelmingly complementary".

"Trying to forcefully decouple two economies of this scale is like trying to unbake a cake — messy, expensive, and ultimately unproductive," he said.

The benefits of choosing pragmatism over mutually assured destruction would extend well beyond China and the EU, Qu said.

"It is a shot in the arm for global stability. At a time when the global economy is struggling with fragmented supply chains and sticky inflation, a stable EU-China economic relationship is a massive stabilizer. Lower uncertainty means lower capital risk premiums, something global markets desperately need right now," he said.