The EU’s difficulties in negotiating with China go beyond tariffs and quotas — structural economic differences, political fragmentation within Europe and broader geopolitical tensions reveal a fundamental misunderstanding of the China that Brussels is dealing with and the world in which it must compete.
The Strategic Disconnect: Europe’s China Blindspot
It’s not just a matter of tariffs or quotas; it’s a reflection of Europe’s short-term memory compared to China’s long-term strategy.
Brussels is still governed by a mainly technocratic and transactional approach, whereas Beijing conducts its negotiations with the kind of patience typical of a civilization that thinks in terms of decades and centuries rather than election cycles. The European Union’s habit of looking at China mostly from regulatory, economic and ideological points of view prevents it from seeing the fundamental causes of tension.
China is not merely another trading partner that can be forced to alter its economic model in accordance with European preferences. It is a major power which has its own historical experience, political system, economic model and strategic goals.
Europe needn’t approve of China’s political system, but if it wishes to negotiate effectively, then it must understand it.
EU leaders ought to remember what the former Singaporean diplomat Kishore Mahbubani has so clearly stated: “China is the country which will drive the 21st century – that should be clear to all.”
The issue is that Brussels too frequently deals with China from a stance of assumed superiority. Although the argument that “China is not a democracy” is constantly employed in order to set Europe apart from Beijing, it fails to shed any light on how China actually thinks or why its policies have led to the economic results they have.
As Kishore Mahbubani has argued, it is difficult to transfer political values from one civilisation to another. In China, historical experience has given particular weight to political stability, social order, peace and material well-being, while Western-style liberal democracy is not necessarily regarded as the overriding political priority.
Mahbubani points to surveys showing exceptionally high levels of satisfaction with China’s government, while arguing that many Chinese associate political stability, effective governance and economic well-being more closely with legitimate government than with Western-style liberal democracy.
Harvard Kennedy School surveys have repeatedly found more than 90% satisfaction with the Chinese government in direct-question surveys in China.
Ignoring these differences does not cause them to vanish. It only makes European strategy less effective.
The Stalemate on the Negotiating Table: The Requests, Contradictions and Wishful Thinking
The negotiations which take place in Beijing in October—something that EU Trade Commissioner Maroš Šefčovič referred to as a “super crucial meeting”—are intended for the purpose of tackling the EU’s huge trade deficit with China, which amounts to €360 billion. Official talks started in June when Brussels asked for much more than just reductions in tariffs.
The European Union wishes to have in place mechanisms which will prevent surges in Chinese exports in certain sectors, to grant European companies greater access to the Chinese market, and to secure long-term guarantees with regard to critical raw materials, especially rare earths.
The discussions have been divided into four areas of work: trade and investment balancing, export controls, intellectual property rights and WTO reform.
There is contradiction at the core of the negotiations.
The European Union wants China to open up its market and increase its purchases of European products, even as it at the same time wants to impose quotas and new restrictions on imports and investments from China.
Brussels is in effect requesting that Beijing grant European companies greater access while at the same time preparing to restrict access for Chinese products.
This most recent development has made the contradiction more evident in that Brussels is urging Beijing to agree to quotas on Chinese exports to the EU. Quotas of this kind go much further than a normal round of talks regarding tariffs and market access.
From the point of view of Beijing, these matters are clearly linked: if Europe limits Chinese access to its own market, why should China then make unequal concessions by opening its market to European companies?
Europe will therefore be in a position to ask China for the kind of economic openness which it is becoming more and more unwilling to grant itself.
The issue isn’t that the EU has no legitimate economic concerns since it does have. The problem is that it seems to want to deal with every economic weakness in Europe by making demands on China and wanting China to solve European competitively problem.
European strategy might instead be a strategy for arriving at a stalemate.
Finally, Europe’s economic relationship with China is not simply a €360 billion deficit. European companies generate in China an estimated €30 billion a year in profits, and repatriate roughly €12 billion in dividends. EU had in 2025 a €21.2bn services surplus with China. Further, Chinese visitors also inject billions into European tourism and retail – in France, Spain and Italy alone, Chinese tourists spent €12 billion in 2025. In a broader tourism-spending methodology, it was €11.7bn in Italy alone. Meanwhile, Chinese investment in the EU stands at around €80 billion.
The top good the EU imports from China are telecommunications and audio equipment; office machines, personal computers and others; and electrical machinery and equipment. And the top European export goods to China are machinery, motor cars and motor vehicles, and motor vehicle parts.
Europe’s Hardball Strategy: All Talk and No Action?
There is evidence to show that Brussels is making the negotiations more difficult. The issue is whether this tough strategy is in fact increasing European leverage or merely making it harder to reach an agreement.
Europe is increasingly demanding all of the following: that Chinese exports to Europe should be reduced, that China’s market should be more open to European companies, that action should be taken regarding subsidies and overcapacity, that guarantees should be given on critical raw materials, and that European safeguards against Chinese industrial expansion should be accepted.
The European Parliament is at the same time looking into imposing stricter restrictions on Chinese investment.
A report issued by Parliament’s rapporteurs in September suggested that especially strict conditions should be imposed on Chinese investment in sectors in which China holds a dominant position around the world, such as electric vehicles, batteries, solar panels and critical raw materials. The conditions proposed are those involving joint ventures with the EU, technology transfer, requirements concerning EU employment and rules on local sourcing, in addition to no public financing or subsidies for Chinese investments in these areas.
This is not the end of the pressure.
It has been reported that France and Germany are aiming at adopting a joint European stance on a kind of mechanism similar to the US Section 301, so that Brussels can act on its own in response to what it sees as unfair foreign trade practices. China has clearly cautioned against such a measure, describing it as protectionist and unilateral and has warned that it might harm trade between China and the EU as well as global supply chains.
This is by no means the right atmosphere for a major breakthrough in trade with China.
China has by no means just pulled back. Instead, Beijing has urged its automakers to invest in Europe, and Chinese officials have been having direct talks with European automotive manufacturers regarding possible solutions to the EV dispute.
The European Foreign Affairs Council has described the rapidly growing Chinese trade imbalance as a “strategic challenge” in its evaluation of the EU’s strategic environment, but the fact that the problem has been identified does not mean that its causes have correctly been diagnosed.
That might be the source of Europe’s greatest weakness. [To be continued]
Ricardo Martins – Doctor of Sociology, specialist in European and international politics as well as geopolitics
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