EU Praises China for Rare Earth Cuts but Urges Trade Rebalancing

EU Urges Prompt Trade Rebalancing with China After Beijing Summit

In the wake of a brief, one‑day meeting held in Beijing, European Union leaders insisted that trade ties with China require immediate adjustment.

Key Points Raised at the Summit

• Urgency of Action: The EU highlighted the necessity for swift changes in its trading relationships with China.
• Balanced Approach: Officials argued for a more equitable distribution of trade interests to safeguard European economic stability.
• Strategic Cooperation: The dialogue underscored the importance of fostering mutually beneficial partnerships while addressing current disparities.

EU‑China Trade Tensions Highlighted at One‑Day Summit

European Commissioner Ursula von der Leyen emphasized that, beyond the existing restrictions on rare earth minerals, two critical issues need urgent attention:

1. Market Access Equalization

Europe demands more open access to the Chinese market in order to mirror the level of freedom that Chinese firms currently enjoy in the EU.

2. Tackling Industrial Overcapacity

China’s generous subsidies inflate domestic production and depress world prices, creating an unfair playing field for external competitors.

The dispute escalated in October when the EU imposed steep tariffs on Chinese electric vehicles. Beijing retaliated with investigations into EU‑produced brandy, pork and dairy, prompting Brussels to label those actions unjustly protective.

Despite the summit’s ambitions, it failed to resolve these open questions. Von der Leyen warned that without concessions on overcapacity the EU risks losing its current level of openness.

European Council President António Costa echoed these concerns, calling for a fair, mutually beneficial trade relationship and stressing the bloc’s readiness for constructive dialogue to find shared solutions.

Next Steps

• Implement policies to enhance market access for EU firms in China.
• Address industrial overcapacity through targeted reforms and cooperation.
• Maintain open, balanced trade relations by fostering transparent dialogue.

Lingering tensions

China Urges the EU to Keep Trade Channels Open

In the latest statements released by the Chinese government, the tone was noticeably more optimistic, with officials proclaiming that “new opportunities and potentials” lie ahead for EU‑China relations.

Calls for restraint from European trade actions

• China urged the European Commission not to pursue trade restrictions on Chinese goods, citing recent disputes over electric vehicles and medical‑device procurement.
• President Xi Jinping, speaking at a formal meeting, asked that the EU maintain an “open and fair trade and investment environment” for Chinese businesses operating within the bloc.

Criticism of the EU’s “de‑risking” agenda

Xi’s key points:

• China opposed the EU’s strategy of reducing “vulnerable dependencies” on China, branding it as a “de‑risking” policy.
• He countered that such moves—encouraged by Ursula von der Leyen and formalised by the G7—can undermine global competitiveness.
• “Building walls and barriers will only foster self‑isolation,” Xi warned, arguing that decoupling supply chains may harm both sides.

Takeaway

China’s latest outreach stresses the importance of keeping the trade relationship fluid while cautioning against the segmentation of global supply chains. The message underscores a call for constructive dialogue rather than punitive measures.

EU and China Clash Over Russia’s War in Ukraine

Background and Core Dispute

Despite a joint summit focused on climate action, the European Union and China remained at odds over Russia’s conflict in Ukraine. The EU has repeatedly highlighted China’s role as a “key enabler,” asserting that Beijing supplies roughly 80 % of the components needed for Russian weaponry.

EU’s Main Accusations

• China allegedly “enables” Russia by providing vital parts for its arsenal.
• EU officials argue that this support tilts the balance of the conflict.

China’s Stance

• Denies any responsibility for mercilessly supporting Russian military efforts.
• Reaffirms its “no limits” partnership with Moscow while maintaining firm opposition to sanctions.

Statements from EU Leadership

In a closing press briefing, EU Commission Chair Nieper Costa emphasized China’s pivotal role, citing:

“As a permanent member of the UN Security Council, China has a key role and responsibility for this.”

She added that the war “extends beyond Europe, threatening the rule‑based global order,” and is therefore not just a “European conflict.”

Ursula von der Leyen’s Appeal

• Urges China to use its influence to compel Russia to accept a ceasefire.
• Highlights that a lasting ceasefire remains a elusive goal for Western allies, despite repeated sanctions.
• States, “How China continues to interact with Putin’s war will be a determining factor for our relations going forward.”

Outlook and Recent Developments

The summit ended on a cooperative note with a joint declaration aimed at advancing climate action ahead of COP30. However, the divergent positions on the Ukraine war signal continued tension between the EU and China moving into the remainder of 2025.