Against the backdrop of the new cold war between the United States and China, the European Union’s top brass seems to be adding to the pressure on China by issuing credible threats in response to four grievances. Alas, the Chinese authorities are probably more amused than alarmed.
ATHENS – On the December 7, the presidents of the European Council and the European Commission, Charles Michel and Ursula von der Leyen, respectively, attended the 24th European Union-China Summit to convey a stern message to Chinese President Xi Jinping. In the eyes of European and American public opinion, and against the backdrop of the new cold war between the United States and China, the EU’s top brass seemed to be adding to the pressure on China by issuing credible threats in response to four grievances. Alas, the Chinese authorities were probably more amused than alarmed by what they heard.
The EU’s first grievance concerns “unbalanced trade.” Von der Leyen put it colorfully claiming that “for every three containers that go from China to Europe, two containers return empty.”
There is, of course, no doubt that sustained trade imbalances may well reflect a mercantilist strategy for permanent surpluses. But the EU accusing China of mercantilism is a bit rich. Over the past decade, China’s current-account surplus averaged 1.65%, while that of the eurozone averaged 2.24%. In the same period, the main engine of Europe’s economy, Germany, recorded an eye-watering 7.44% surplus.
ATHENS – On the December 7, the presidents of the European Council and the European Commission, Charles Michel and Ursula von der Leyen, respectively, attended the 24th European Union-China Summit to convey a stern message to Chinese President Xi Jinping. In the eyes of European and American public opinion, and against the backdrop of the new cold war between the United States and China, the EU’s top brass seemed to be adding to the pressure on China by issuing credible threats in response to four grievances. Alas, the Chinese authorities were probably more amused than alarmed by what they heard.
The EU’s first grievance concerns “unbalanced trade.” Von der Leyen put it colorfully claiming that “for every three containers that go from China to Europe, two containers return empty.”
There is, of course, no doubt that sustained trade imbalances may well reflect a mercantilist strategy for permanent surpluses. But the EU accusing China of mercantilism is a bit rich. Over the past decade, China’s current-account surplus averaged 1.65%, while that of the eurozone averaged 2.24%. In the same period, the main engine of Europe’s economy, Germany, recorded an eye-watering 7.44% surplus.