China and EU hold trade talks regarding hybrid vehicle exports

BEIJING – China and the European Union can avoid “escalation” in various contentious disputes, Beijing said on Oct 10, as worries of a damaging trade war simmer.

Discussions earlier in October in Beijing between Chinese Commerce Minister Wang Wentao and EU counterpart Maros Sefcovic were “successful” and marked “a new starting point”, China’s commerce ministry said in an online statement.

“The outcomes and consensus reached by both sides fully demonstrate that China and the EU have both the willingness and the wisdom to manage and properly handle differences through dialogue and consultation, and to effectively avoid escalation of frictions,” it said.

Sefcovic said on Oct 9 after the conclusion of two-day talks that Beijing had agreed to “moderate” exports of hybrid vehicles to the 27-nation bloc, where local carmakers are increasingly feeling pressure from Chinese competitors.

The EU trade chief told reporters that the deal “opens the prospect of cutting China’s export (of hybrids) by more than a half”, based on projections over a four-year period.

Shipments of vehicles to the EU are among the most controversial in China’s mounting trade surplus with the bloc that now reaches around €1 billion (S$1.43 billion) every day.

Many in Europe accuse China of unfair trade practices, including supporting firms with huge subsidies, price dumping and currency manipulation.

Exacerbating the issue is a persistent demand slump in China’s domestic economy, prompting manufacturers to seek alternative markets abroad.

A joint statement published on Oct 9 said the two sides had “reached an understanding on trade in hybrid vehicles in a (World Trade Organisation) compliant manner”, describing the discussions as “intensive”.

Beijing’s commerce ministry said on Oct 10 that the talks included “in-depth discussions on trade in electric vehicles and hybrid vehicles, avoiding escalation of the situation and effectively safeguarding the practical export interests of Chinese enterprises”.

The talks also saw China commit to continue the supply of vital items including rare earth minerals to the EU – a topic closely followed since Beijing’s introduction of export licence requirements in 2025.

“Both sides will continue to step up work on important economic and trade issues of common concern,” Beijing’s commerce ministry said, adding that the next such meeting will be held in March. AFP