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China-EU relations
ChinaDiplomacy

EU confronts ‘China shock’ ahead of pivotal Brussels trade talks

There is a growing sense Europe will have to learn to ‘live with’ Beijing’s economic model, which it accuses of undercutting its industries

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Volkswagen is reportedly considering cutting 100,000 jobs in the face of fierce competition from China. Photo: Reuters
Finbarr Berminghamin Brussels

European Union leaders had a week to bask in their rare, relatively united stance on China policy before news broke to remind them of the urgency of their task: German car giant Volkswagen was reportedly planning up to 100,000 job cuts in the face of cutthroat Chinese competition.

Seven days previously at a European Council summit in Brussels, leaders from the EU’s 27 member states had instructed the European Commission to accelerate its efforts to fight back against what is seen as a damaging surge in Chinese shipments, even while telling it to ramp up engagement with Beijing.

The Volkswagen news was still swirling in Brussels on Monday, as trade chief Maros Sefcovic prepared to welcome Chinese Commerce Minister Wang Wentao for crucial talks.

EU sources confirmed the two sides would launch a new trade and investment consultation platform designed to streamline communications.

But the Europeans also see it as a means of managing the fallout from the spiralling trade tensions between the two sides given their low expectations that they will be able to strike a grand bargain.

“We have to face the reality – China’s economic model, driven by overcapacity, will not change. We have to live with it and change ourselves,” one senior source said.

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