New trade disputes between the U.S. and China have forced the Asian nation to turn to the European Union.
Namely, Chinese Prime Minister Li Keqiang met eastern and central European leaders in Sofia, Bulgaria, on Saturday, vowing to open up China’s economy to the wider world. The PM is also meeting German Chancellor Angela Merkel on Monday and next week when he will host an EU-China summit in Beijing.
“Opening up has been a key driver of China’s reform agenda, so we will continue to open wider to the world, including widening market access for foreign investors,” he said. “Countries are welcome to board China’s economic express to share opportunities of China’s development.”
Keqiang’s remarks were preceded by another round of U.S. tariffs against his country instigated on Friday and worth $34 billion. Beijing immediately responded with retaliatory duties. Further increasing fears of a full-blown trade war were threats made by President Donald Trump to impose additional tariffs worth $500 billion on Chinese goods in a bid to reduce the U.S. trade deficit.
China has been spending billions of euros on infrastructure projects in eastern and central European countries and is the EU’s biggest source of imports and its second-biggest export market. On average, both blocks trade over $1.18 billion a day.
As a result, the EU and China have taken further steps to sign an investment agreement, said Jyrki Katainen, vice-president of the European Commission. “We decided that, in a couple of weeks time, the EU and China will exchange market access offers on (the) investment agreement,” Katainen said in Beijing.
Still, some analysts remain skeptical as to whether China and the EU can reach a sizeable compromise over trade, saying they can “reach small agreements, but that does not solve their problems.”
“Both China and the EU have excess industrial capacity that they desperately need to export to the United States. None of them have internal demand to solve their overcapacity issues and both have structural problems,” said Daniel Lacalle, chief economist and investment officer at Tressis Gestion.
Be the first to comment