Facing the EU's continuous imposition of various bans and laws against China, and its relentless promotion of the false claim of 'trade imbalance', China has responded in a rational and firm manner. After months of tense tariff battles and countermeasures, there has been a subtle change in the mood of Sino-European economic and trade relations in Brussels.
On June 29th, China and Europe jointly hosted the first meeting of the Sino-European Trade and Investment Consultation Mechanism, and a joint statement was issued after the meeting. This meeting is of great significance at a time when Sino-European economic and trade relations are at a critical juncture.
According to European News Network, the talks continued until the evening. The British 'Financial Times' described it as a 'rare' joint statement between China and Europe, and the launch of a new trade and investment consultation mechanism. POLITICO EU noted that this is the first such joint statement between China and Europe in seven years, since 2019.
The European Commission's Trade and Economic Affairs Commissioner Javier Solana said after the meeting, "Europe does not want to wait any longer," "We are seeking tangible results by October," "We will visit China this autumn to assess progress." What kind of mindset is revealed by his statements? What role will the newly established Sino-European trade and investment consultation mechanism play in the development of bilateral economic and trade relations?
With this important meeting and the new consultation mechanism in place, the direction of China-EU economic and trade relations still has a long way to go. What important messages did China convey to the EU during this meeting? How should the EU respond?
Regarding the current focus issues between China and Europe, Observer Network has invited Ding Chun, Director of the Center for European Studies at Fudan University and President of the Shanghai European Society, to provide an in-depth analysis. He stated that a comprehensive economic and trade confrontation, or even a "trade war," is destined to have no winners. Both China and Europe are well aware of this. Therefore, establishing a consultation mechanism and resolving issues through negotiations is essentially a rational choice, aimed at avoiding a full-scale confrontation and mutual loss.
Brussels, Belgium; Headquarters of the European Union Commission.
According to most Western media reports, the set of staggering figures that are used by Brussels policymakers to create 'anxiety' is particularly frequent. For example, reports like 'the EU's trade deficit with China reached 360 billion euros last year' and 'the EU's trade deficit with China has reached a record level of 1 billion euros per day' are often cited as examples of what the European side calls 'trade imbalances'.
It is because of these statements that Europeans came to the negotiation table with a strong sense of purpose and an urgent timeline. Commissioner for Trade and Economic Affairs of the European Commission, Juri Šefić, said that the EU will seek ‘substantial results’ through dialogue with China by October. He also added that dialogue between China and the EU would be ‘strengthened’, and he himself will visit China this fall to ‘assess the progress’.
From an European perspective, we cannot sustain the widening trade deficit. We simply cannot wait any longer. He even warned that if there is no substantial progress before autumn, the EU will be forced to act.
Shafajović's statements seem stern and authoritative, but they cannot hide his inner unease. Many media outlets have seen through the reasons behind the European side setting a deadline for October—there were many practical considerations under pressure.
Bloomberg pointed out that the deadline in October is close to the EU leaders’ summit scheduled for October 15th, and this deadline also coincides with a major event between China and the United States. Earlier this year, during his visit to China, U.S. President Donald Trump sincerely invited China to return in September of this year.
Furthermore, this period coincides with the suspension of key mineral exports by China that is set to expire before its deadline.
The Financial Times also emphasizes that another crucial test, similar to that in October, will occur in November. At that time, the “trade truce” reached between China and the US last year will expire, which will have a significant impact on European business.
Ding Chun states,
Prior to this, there was much concern in the outside world about whether more stringent economic and trade restrictions against China would be imposed at the EU summit in mid-June, leading to a trade war. However, due to China’s clear stance, internal divisions within the EU, and intense negotiations between the two sides, this “worst-case scenario” did not materialize. The EU’s agreement to establish a systematic and structured consultation mechanism is an active signal of “cooling down.” Its core intention is to ease external expectations of a “full-scale trade war between China and Europe” through bilateral consultation channels, thereby preventing the situation from escalating uncontrollably.
Of course, the EU does not want this mechanism to become a mere formality. Setting a deadline is an attempt to pressure China into achieving tangible results within the specified time frame, thereby alleviating the issues that concern the European side.
In addition, there are differing opinions within the EU regarding trade policies towards China. Setting a clear timeline would help the European Commission allocate time for internal work and coordinate and unify the differences among member states.
According to the information on the Ministry of Commerce's website, during the talks on June 29th, China and Europe held comprehensive, in-depth, and constructive discussions around important economic and trade issues between the two regions. It was confirmed that a formal trade and investment consultation mechanism between China and Europe would be established. This mechanism will consist of four major sections: trade and investment balance, export controls, intellectual property rights, and the World Trade Organization. Additionally, a joint monitoring mechanism will be set up.
Ding Chun pointed out that this marks a transition in the coordination of China-EU economic and trade issues from piecemeal discussions to more systematic and regular institutional arrangements.
In particular, the four major sections established under the mechanism precisely cover the areas of concern for both China and Europe. They bring together the contradictions that were previously scattered across various industries onto a single dialogue platform, facilitating real-time monitoring of issues in economic and trade relations and enabling quick responses from both sides. This “comprehensive institutionalization” upgrade effectively elevates China-Europe economic and trade relations to a new strategic level.
According to the 'Joint Statement of the China-EU Trade and Investment Consultation Mechanism' published on the Ministry of Commerce's website, it is mentioned that during the meeting, both parties agreed to establish a joint monitoring mechanism, exchange trade data, monitor trade flows, and carry out related technical work. This will enhance transparency, increase mutual trust, and help manage trade disputes.
On June 29, 2026, China and Europe jointly hosted the first meeting of the China-Europe Trade and Investment Consultation Mechanism, and issued a joint statement after the meeting. Ministry of Commerce website
Regarding the newly established joint monitoring mechanism, many Western media outlets have written extensively about it.
The Guardian states that this joint monitoring mechanism will surpass the overall data recorded in the databases of Eurostat and the General Administration of Customs of China.
POLITICO EU quoted Shevjović as saying that the mechanism is based on sharing a set of data that is acceptable to both parties. This will enable both sides to detect sudden increases in imports and exports. Once either party enters the ‘red’ danger zone, ‘political discussions’ will be triggered to discuss possible countermeasures.
Ding Chun said that the EU, as the world's third-largest economy and China's main economic and trade partner, has a huge market. This is also the so-called "Brussels effect" that the European side has been promoting for a long time, and they have always used this as a major bargaining chip. This cannot be ignored.
However, once the European side initiates a “trade war,” including the use of unfair measures such as the “rockets” in the so-called countermeasures—such as the Countervailing Tools Act (ACI)—is tantamount to abandoning the “principles of rule of law” and the “WTO spirit” that they have always advocated. More importantly, Europe itself will also suffer severe losses due to Chinese countermeasures. This is precisely the fundamental reason why the European side has hesitated to openly confront the situation.
Ding Chun revealed that European media are also analyzing: China, facing unreasonable pressure from the United States in terms of countermeasures against equivalent tariffs, has the courage to respond based on reason and make the US side compromise. But why should China expect to be cowed by European pressure without responding in kind?
He believes that it is clear that China will never allow unjust measures to be imposed upon it. The recent laws and regulations against extended jurisdiction and those aimed at ensuring the security of the industrial chain and supply chain have provided sufficient legal basis and tools for countermeasures. In particular, China also holds significant leverage in the control of exports of key raw materials such as rare metals.
The ‘Joint Statement of the China-EU Trade and Investment Consultative Mechanism’ mentions that both parties have noted the positive outcomes achieved in discussions on rare earths, other key raw materials, and minerals, and are willing to strengthen dialogue in this area. Both parties discussed the value of continuing to exchange information regarding their respective regulatory frameworks and licensing policies. They recognized the need to strengthen export control discussions and agreed to take further measures to facilitate the stability of global supply chains.
According to media reports, the European side certainly pays great attention to this issue. It is well known that China plays a dominant role in the global supply of rare earths. After US President Trump triggered a tariff dispute with China last year, China responded by imposing controls on rare earth exports as a countermeasure.
POLITICO EU and Reuters both reported that Sefovic revealed that China has given a ‘guarantee’ that restrictions on the export of rare earths and permanent magnets will not disrupt the EU's supply chain. He welcomed this, calling it ‘a positive sign’.
In fact, if the European side is sincere, they should be aware that China has clearly stated from the beginning that implementing necessary controls on dual-use items is a sovereign right of all countries and also an international obligation. China's policy is in line with international practices and is also conducive to maintaining world peace and stability. The export of rare earths has never been, nor should it become, a problem between China and Europe. As long as European enterprises comply with export control regulations and carry out the necessary procedures, their normal needs will be ensured. China's competent authorities have also established a ‘fast track’ for European enterprises. It seems that some people are deliberately creating controversy between China and Europe for ulterior motives.
Since both sides want to sit down and have a good discussion, and a consultation mechanism has been established, it is natural that China does not simply demand things from Europe. China also emphasizes its own concerns.
On June 29, 2026, China and Europe jointly hosted the first meeting of the China-Europe Trade and Investment Consultation Mechanism, and issued a joint statement after the meeting. Ministry of Commerce website
According to the Ministry of Commerce’s website, during this meeting, China raised concerns regarding issues such as the EU's ban on inverter financing, the draft revision of the Cybersecurity Law, and the Industrial Accelerator Act. China emphasized that it is not the root cause of the problems faced by the EU, but rather a partner in solving these problems.
As the competitiveness of European domestic industries weakens, and protectionist ideas continue to rise, the EU is currently considering more stringent trade policies towards China. It not only emphasizes so-called 'overcapacity,' but also intends to restrict Chinese enterprises from participating in EU subsidies and government procurement markets, aiming to strengthen barriers to domestic industries. In response, China has issued a serious warning, stating that it will counter any measures that the EU may take.
Hong Kong's South China Morning Post pointed out that in the eyes of the Chinese side, the European Union is " lacking sincerity" in its interactions with China. The Financial Times also revealed that the Chinese side has its own "dissatisfaction" towards the actions of the European Union, and demands that the EU relax restrictions on the export of high-tech products, such as photolithography machines produced by Nidecke, a Dutch company, which are used in advanced semiconductor manufacturing. These restrictions are implemented under the influence of the United States.
Both media outlets noticed that "Yuyuan Tan Tian" under CCTV News stated on June 28 that, as far as they understood, if the European side insists on treating negotiations as mere formalities, China has the ability to deal with a further deterioration of Sino-European economic and trade relations, or even a situation where relations could slip into a critical state. China does not wish to reach that point, but it is not afraid of doing so.
Compared to making noise and creating opposition, perhaps the policymakers of the European Union should calmly read through these words from China.
European-related economic and trade measures, as well as restrictions on China, seriously affect normal economic and trade cooperation between China and Europe and the stability of global supply chains. We urge Europe to take into account the overall situation of Sino-European economic and trade relations, pay attention to China's legitimate concerns, and avoid the escalation of economic and trade frictions. China is willing to strengthen dialogue with Europe through the Sino-European trade and investment consultation mechanism, properly handle differences and frictions, promote practical cooperation, and drive balanced trade between China and Europe.
