Urgent action by China to address its subsidy-driven industrial strategies, overcapacities and export controls is needed to fix strained EU-China trade ties, a senior EU official said, warning that recent diplomatic gestures by Beijing fall short. The remarks at an MLex event come a month ahead of a bilateral summit, where tensions over restrictions on rare earth element exports and market access are expected to dominate talks.
China must tackle subsidy-driven industrial policies and overcapacities if it wants to improve trade relations with Europe, a senior EU trade official has said.Maria Martin-Prat de Abreu, deputy director in the European Commission’s trade department, told an event* in Brussels today that "diplomatic gestures" weren't enough to ensure a healthy EU-China trade relationship.
“What we need is to see a real effort for China, first to acknowledge and second to address some of these structural problems that we have been trying to discuss with them for years now, and that are distorting trade,” she told the event, organized by MLex.
China recently lifted sanctions imposed in 2021 on five EU lawmakers in a bid to improve trade relations (see here). Imposed on the European Parliament’s human rights subcommittee and individual lawmakers, the sanctions were a direct response to EU measures against Chinese individuals and an entity over alleged human-rights abuses against the Uyghur minority in Xinjiang (see here).
This gesture isn't seen as enough to ease tense trade tensions between the EU and China, however, especially ahead of a bilateral summit expected on July 24–25.
“We always talk about the [trade] deficit with China, the fact that it’s increasing in value,” Martin-Prat added. “This trade deficit is the result of an economy that makes it difficult for our countries and our businesses to export and operate on a level playing field when established in China.”
“The problems, and I have followed them for many years, are not being solved and are not improving.”
— Export controls —
Export controls on rare earth elements have become the latest source of trade tension between the EU and China, with Brussels pressing Beijing to exempt civilian goods from its tightened licensing regime.
The new measures, in force since April 4 (see here), require Chinese exporters to obtain transaction-based licenses and provide end-use documentation. EU officials say the rules are delaying shipments and triggering production risks in sectors such as automotive manufacturing.
“We are seeing the manipulation of the concept of export controls,” Martin-Prat said, adding that although many countries use this mechanism for the export of goods that have both civilian and military applications, China’s restrictions are going beyond that scope.
“The current situation we have now, with the unjustified, broad and extremely disturbing use of export controls for products where you cannot, in a proportionate manner, argue there is a dual-use objective — that’s not admissible,” she said.
* “From US tariffs to a competitive China: Europe’s trade strategy of tomorrow,” MLex, Brussels, June 25, 2025.
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