BEIJING (Reuters) – China could open its economy if it so wished, European Commission President Jean-Claude Juncker said yesterday, with the European Union calling on countries to avoid a trade war even as pressure mounts on Beijing over its industrial policies.
Playing host to Mr Juncker and European Council President Donald Tusk, Chinese Premier Li Keqiang stressed the need to uphold free trade and multilateralism as the United States and China become increasingly mired in a trade dispute, with no sign of negotiations on the horizon.
US President Donald Trump has warned he may ultimately impose tariffs on more than $500 billion worth of Chinese goods – nearly the total amount of US imports from China last year – to combat what the US says are Beijing’s trade abuses.
China has sworn to retaliate at each step.
Long accused of protectionist tactics that make it a difficult place for foreign firms to operate, China is trying to reverse that narrative amid the escalating trade war by approving huge investments, such as a $10 billion petrochemicals project by Germany’s BASF.
Mr Juncker, speaking at a joint news briefing with Mr Li and Mr Tusk at Beijing’s Great Hall of the People, said that move showed “if China wishes to open up it can do so. It knows how to open up”.
“We need just and fair multilateral rules. The EU is open but it is not naive,” Mr Juncker said later at a business forum.
Chinese companies are the chief target of EU measures to counter dumping and unfair subsidies, and the European Commission last year proposed that it should be allowed to scrutinise foreign investments amid rising concern about Chinese acquisitions on the continent.
Mr Tusk called on China, the United States and other countries to avoid trade wars and to reform the World Trade Organization so it is equipped to combat forced technology transfers and government subsidies, complaints underpinning Mr Trump’s tariffs.
“It is the common duty of Europe and China, but also America and Russia, not to destroy this order but to improve it, not to start trade wars, which turned into hot conflicts so often in our history, but to bravely and responsibly reform the rules based international order,” Mr Tusk said at a meeting with Mr Li.
“There is still time to prevent conflict and chaos.”
Critics of Beijing’s policies say foreign firms are competing with Chinese rivals backed by massive, market-distorting subsidies and government support, issues not sufficiently addressed under WTO rules.
Both China and Europe have stressed the need for trade differences to be addressed through the WTO, but the United States has said China’s unfair policies are too urgent and too big for the trade body to handle.
The China-EU meeting produced a communique affirming the commitment of both sides to the multilateral trading system. Leaders failed to find sufficient consensus for such a joint statement after meetings in 2016 and 2017.
The statement said Beijing and Brussels had submitted market access offers for the first time as part of ongoing investment treaty talks, adding that the exchange should open a “new phase” in the negotiations that both sides viewed as “a top priority”.
“The EU took note of China’s recent commitments to improving market access and the investment environment, strengthening intellectual property rights and expanding imports, and looks forward to their full implementation as well as further measures,” the statement said.
