China, EU can foster a dynamic trade balance through sustained development

The first meeting of the China-EU trade and investment consultation mechanism was recently held in Brussels, where the two sides issued a joint statement agreeing that China and the EU are each other's stable, balanced, and key trading partners.

Amid rising global protectionism and profound shifts in the global economic landscape, China and the EU have once again demonstrated that deeper cooperation and equal-footed consultation remain the most effective way to resolve trade frictions and ensure the stability of bilateral economic ties.

The mechanism has pinpointed four priority work areas covering trade and investment balance, export controls, intellectual property rights protection and WTO reform -- areas that reflect the key concerns of both parties.

China and the EU also agreed to establish a joint monitoring mechanism to exchange trade data, track trade flows and carry out related technical work. These constructive arrangements for addressing differences and managing disagreements mark an important step toward institutionalized and regularized management of China-EU trade issues.

In recent years, protectionist tendencies have spread in parts of the EU. Some politicians have repeatedly promoted unfounded narratives about an alleged "China-EU trade imbalance," "industrial overcapacity" and "unfair competition," while pedding misleading narratives such as "China Shock 2.0."

These claims have been used to justify a series of restrictive trade measures that have created unnecessary obstacles to normal economic and trade cooperation between China and the EU. At their core, such actions reflect both a misunderstanding of the nature of China-EU economic relations and an inability to address EU's own structural challenges.

Misperceptions should be corrected with facts, while structural problems must be addressed at their source.

Take the frequently cited allegation of "overcapacity" allegation as a typical example. Much of the EU's criticism rests solely on its merchandise trade deficit with China, while overlooking its substantial surplus in services trade. According to Chinese statistics, the EU recorded a services trade surplus of $48.3 billion with China in 2025. When both goods and services trade are taken into account, the overall trade imbalance narrows significantly.

The challenges facing certain European industries stem primarily from internal structural factors, including persistently high energy costs, inconsistent industrial policies and insufficient innovation momentum.

Resorting to protectionist barriers instead of sharpening industrial competitiveness is ultimately self-defeating. It not only delays necessary industrial upgrading but also risks compounding structural weaknesses, to the detriment of European consumers and Europe's long-term growth prospects.

Markets performance speak louder than empty rhetoric. To a large extent, the current structure of China-EU trade reflects decisions made independently by businesses based on considerations of cost, efficiency, market demand and supply chain resilience.

According to the European Automobile Manufacturers' Association, sales of Chinese-brand vehicles in Europe reached 138,400 units in May this year, up 65 percent year on year. This robust growth is fundamentally the result of market recognition and the rising competitiveness of China's manufacturing sector, rather than alleged unfair competition.

Many forward-looking voices in Europe have already pointed out that protectionist measures such as tariffs will not make Europe more competitive. Instead, they merely postpone the transformation and upgrading that European industries themselves need to undertake.

China is never the source of Europe's challenges; it is a partner in addressing them. China has consistently approached dialogue with the greatest sincerity and remains committed to resolving differences through consultation. At the same time, it will firmly safeguard its legitimate industrial and trade interests.

China has reiterated that the essence of China-EU economic and trade relations lies in complementarity and mutual benefit. Such a relationship should and can achieve a dynamic balance through continued development.

The two sides are each other's second-largest trading partners. In 2025, bilateral merchandise trade reached $828.1 billion, while two-way investment stock exceeded $280 billion. From automobiles and new energy to biomedicine and machinery manufacturing, the industrial and supply chains of China and the EU have become deeply integrated and highly complementary, with mutually dependent markets and shared interests.

As Jens Eskelund, president of the European Union Chamber of Commerce in China, observed, China has long been more than simply a profitable market for European companies; it has become an indispensable part of global supply chains. For European businesses, maintaining competitiveness depends precisely on participating in global division of labor and international cooperation, rather than artificially fragmenting industrial and supply chains.

As two major global economies and core markets, China and the EU remain a relationship whose stability carries significance far beyond the bilateral level.

Together, the two economies account for more than 1/3 of global economic output, while their bilateral trade represents nearly a quarter of world trade, making an important contribution to global economic growth.

The China-Europe freight trains have made more than 130,000 trips, transporting goods worth over $520 billion. It has become not only a major logistics corridor connecting Asia and Europe, but also an important pillar supporting the stability of global industrial and supply chains and improving livelihoods along its routes.

At a time when unilateralism and protectionism continue to disrupt the international trading system and WTO reform has reached a critical stage, China and the EU share broad common interests and enormous opportunities for cooperation in areas including climate governance, digital trade and global development, issues that affect the common interests of all humanity.

With the consultation mechanism officially launched, the true test lies in concreted actions from both sides.

As comprehensive strategic partners, China and the EU should uphold the principles of mutual respect, equality and mutual benefit, and work together to ensure the long-term, steady development of bilateral economic and trade relations.

Doing so will benefit businesses and people on both sides while contributing to international fairness and justice, safeguarding the global trading system, and promoting lasting peace, stability and prosperity of the world.

(Zhong Sheng is a pen name often used by People's Daily to express its views on foreign policy and international affairs.)