EU trade chief Šefčovič begins two-day Beijing talks trip

The European Union and China enjoy one of the world's most important trading relationships.

So there is much focus on EU trade commissioner Marcos Šefčovič's trip to China for talks considered critical to the future of their relationship.

The recent threat of tariffs from Brussels and Beijing's response has raised tensions ahead of these negotiations.

The EU says it wants to rebalance trade amid concern that Chinese imports are rising while the bloc's exports to China are dwindling.

Beijing dismisses European accusations that the relationship is unbalanced or that China is undercutting EU manufacturers.

Brussels complains that China is undercutting key European industries, particularly with imports of competitively priced electric vehicles that are proving popular.

In retort, Ministry of Foreign Affairs spokesman Guo Jiakun told reporters on September 18: "The development of China's electric vehicle industry has provided consumers worldwide with high-quality, cost-effective products and has made a positive contribution to the global green and low-carbon transition."

Commission President Ursula Von Der Leyen told lawmakers in her annual address two days earlier: "Our trade deficit with China is now €1 billion a day. It has reached a tipping point. Some say the second China shock is looming. But it's already here."

China points to years of investment in AI to power the most advanced technology paying off with global consumers.

And the EU needs China. The bloc admits it's fallen behind in AI and wants Beijing to lift export controls on metals and minerals – rare earths – needed to make the most advanced microchips and semiconductors.

Chinese Commerce Minister Wang Wentao met EU Trade Commissioner Šefčovič in Beijing on 8 October, as the two sides began two days of talks.

Šefčovič has remained optimistic about bringing back some kind of outline deal for the European Council to discuss at its next meeting on October 15. But as the deadline looms, the EU is reportedly considering the use of tariffs similar to those wielded by the Trump administration against Beijing before scaling them back.

Von der Leyen hinted as much in her September speech when she said: "We will use all the tools at our disposal to ⁠rebalance our relationship."

Beijing has responded to those threats, with Guo Jiakun saying: "We will closely monitor the EU's actions and take necessary measures to safeguard the legitimate rights and interests of Chinese enterprises."

While the EU accused China of what's called dumping – selling products at below market rates – Beijing is investigating the EU over similar allegations.

China's State Information Office announced that it's examining claims the EU sold chemicals used in pesticides and pharmaceutical products at prices aimed at undercutting Chinese competitors.