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China abruptly cancelled two important diplomatic meetings with the EU this month as tensions between the two trading superpowers build over soaring Chinese exports to the bloc.
Chinese officials cancelled the two dialogues in Beijing — a ministerial-level discussion on digital issues and another involving the deputy secretary-general of the EU’s diplomatic service, Olof Skoog — people familiar with the matter said.
“Two dialogues planned for this month were cancelled by the Chinese side at short notice,” said one person familiar with the matter.
No reason was given, they said. But such tactics are often used by both sides to signal unhappiness with each other’s policies. The EU last year refused to hold a flagship economic meeting with Beijing ahead of a leaders’ summit in July because of a lack of progress on numerous trade disputes.
This year, Beijing has mounted a campaign to deter Brussels from adopting new measures designed to curb Chinese exports, which surged 16.4 per cent between January and May compared with a year earlier, with state media raising the spectre of a “trade war”.
Beijing is furiously lobbying against the EU’s proposed Industrial Accelerator Act, which would bar some Chinese products from public procurement contracts and limit takeovers of European companies.
The European Commission has also recently outlined an update to its cyber security act to exclude Chinese companies such as Huawei from telecommunications networks and solar energy systems.
Adding to Beijing’s concerns, the EU has blocked public funding for imported inverters used to control solar panel installations and other energy technology, a product dominated by China.
The Commission last month called the rising trade deficit, now €1bn a day, “unsustainable” and has threatened fresh tariffs on Chinese goods to protect the bloc’s rapidly eroding industrial base, with sectors such as the car industry under particular pressure.
It has also opened three anti-dumping investigations in June.
“Beijing does not want a trade war with the EU, yet it will take resolute countermeasures should the EU further target Chinese companies or products,” said a commentary in Xinhua, China’s state news agency.
“The EU should not and cannot afford to fight a ‘trade war with China’,” said the Global Times, a Communist Party nationalist mouthpiece.
Beijing appears to be trying to send a warning to the EU’s national leaders ahead of a European Council summit in Brussels next week. Leaders at the summit will consider a tougher China policy, though the agenda says only that they will discuss “competitiveness and global economic challenges”.
Bart De Wever, Belgian prime minister, ridiculed the approach in a speech on Tuesday. “They have called it geoeconomic imbalances, just not to name China by name, because we are so afraid that we don’t even dare to do that,” he said.
EU officials say Beijing is lobbying the bloc’s member states directly to try to prevent them forming a joint approach.
The Global Times said Chinese commerce minister Wang Wentao was also expected to visit Europe in late June for talks.
At the same time, Beijing is passing laws that are making the operating environment in China, which companies say is already difficult, even more fraught.
Beijing in April enacted new rules, known as orders 834 and 835, to protect China’s supply chain security and counter foreign attempts to exercise extraterritorial control over Chinese companies, for example through sanctions.
Beijing has also passed a new outbound direct investment law that includes countermeasures for foreign restrictions it says discriminate against Chinese companies. It is also closely regulating Chinese investments offshore, particularly those involving transfers of technology or data.
The Commission said the cancelled meetings were “in the process of being rescheduled”.
“Engagement and dialogue between the EU and China is ongoing at multiple levels,” it said, citing a June 9 meeting in Brussels between Ditte Juul Jørgensen, director-general for trade, and China’s vice-minister of commerce Ling Ji.
Jørgensen and Ling had exchanged views and engaged in “in-depth discussions, including to help prepare other upcoming EU-China meetings”, the Commission said.
