From CNBC: 2024-03-19 21:00:01

A photovoltaic module company in Hefei, Anhui province, on Feb. 20, 2024. Trade tensions between Europe and Beijing are expected to rise due to China’s increased ability to manufacture strategically important industries at lower costs, says EU Chamber of Commerce president Jens Eskelund. There are concerns about overcapacity in manufacturing, with the potential for price wars.

With China shifting focus to high-end manufacturing, concerns about oversupply are on the rise. Eskelund noted that various industries are facing overcapacity, posing challenges to global markets. Manufacturing accounts for a significant portion of EU employment and is crucial to the bloc’s economic value added.

The EU and China need to engage in honest discussions about the implications of China’s manufacturing emphasis for global trade. China’s growing influence as a trading partner raises concerns about protecting Europe’s industrial base. Both sides must work together to ensure trade flows are not disrupted.

The recently released EU Chamber of Commerce report highlights the growing political risks for European businesses in China. The US export restrictions on Chinese companies and Beijing’s response have made operations challenging for European companies. Security concerns are increasing in China’s latest five-year planning document, affecting various industries.

Read more: EU-China trade relations in ‘slow-motion train accident’: business group