EU Wants China to Limit Hybrid Exports

Brussels has asked Beijing to voluntarily limit exports of hybrid cars to Europe in an effort to avert a broader trade conflict and keep Chinese brands’ share of the EU market at around 15%, the Financial Times reported.

“If they will not limit their exports to our market then we will”, the newspaper quoted a European official as saying. “This is about stopping deindustrialisation. We have to act. It’s about managed trade.”

The demands extend beyond cars to other products, including chemicals, while Brussels is also pressing Beijing to increase its purchases of European goods.

The EU did not immediately respond to requests for comment from Reuters, which was unable to independently verify the Financial Times report.

European Commission President Ursula von der Leyen said on Wednesday that the bloc would use all available tools to reduce its trade imbalance with China. The EU’s goods deficit with the country reached €360.6bn ($426bn) last year and grew by another 9% in the first half of this year.

“Some say the second China shock is looming. But it’s already here”, von der Leyen said, warning that the imbalance was contributing to deindustrialization in Europe.

EU Trade Commissioner Maros Sefcovic, who is leading negotiations with Beijing, expects concrete results by October and is due to visit China early next month.

Brussels attributes the rapid growth in Chinese exports of chemicals, batteries and vehicles to excess production capacity. Beijing rejects that assessment and describes the criticism as protectionism intended to constrain China.

(Reuters, bak)