1. Home
  2. Studies
  3. European trade policy and China: Steps towards a new balance and fair competition
Jürgen Matthes IW-Analyse No. 138 10. September 2020 European trade policy and China: Steps towards a new balance and fair competition

For the European Union, China is both an important trading partner and, with its very different political system and industrial policy, a new competitor. From a European perspective, the main cause for concern is how China’s state capitalism has created distortions in economic competition which are increasingly affecting world markets.

Download PDF
Steps towards a new balance and fair competition
Jürgen Matthes IW-Analyse No. 138 10. September 2020

European trade policy and China: Steps towards a new balance and fair competition

IW-Analyse

Download PDF

Share this article:

or copy the following link:

The link was added to your clipboard!

German Economic Institute (IW) German Economic Institute (IW)

For the European Union, China is both an important trading partner and, with its very different political system and industrial policy, a new competitor. From a European perspective, the main cause for concern is how China’s state capitalism has created distortions in economic competition which are increasingly affecting world markets.

Unfortunately, the world’s current multilateral trade regime has inadequate mechanisms for dealing with industrial subsidies and state-owned enterprises. Various constructive attempts by the EU and the USA to reform the rules of the World Trade Organization (WTO) have continued to meet with Chinese resistance. Nor, despite massive pressure, especially from the USA, has China so far made any substantial concessions on industrial subsidies in bilateral negotiations. The EU should therefore act unilaterally, making greater use of existing trade defence instruments within the WTO framework, as the USA has long been doing, and expanding its own tool box. These measures will serve the dual purpose of preparing for a further increase in Chinese competitive distortions on the world market and of exerting more pressure on China to agree to new trade rules on industrial subsidies. After all, if the Chinese government continues to reject reform of the respective WTO rules, the multilateral trading system risks permanent damage.

Download PDF
Steps towards a new balance and fair competition
Jürgen Matthes IW-Analyse No. 138 10. September 2020

Jürgen Matthes: Die europäische Handelspolitik und China – Schritte zu einer neuen Balance mit fairem Wettbewerb

IW-Analyse

Download PDF

German Economic Institute (IW) German Economic Institute (IW)

Share this article:

or copy the following link:

The link was added to your clipboard!

More on the topic

Read the article
AIECE General Report Autumn 2022 - Part I
Michael Grömling / Michelle Koenen / Gero Kunath / Thomas Obst / Sandra Parthie IW-Report No. 65 5. December 2022

AIECE General Report Autumn 2022 - Part I

Private households, companies and governments in Europe are facing enormous challenges. First, far-reach-ing transformations in economic life are on the horizon for the current decade and beyond. Demographic developments are exacerbating the shortages of ...

IW

Read the article
Sandra Parthie Event 21. November 2022

panel discussion: Challenging times for the US and EU - Where are the economic and monetary policies headed?

The Russian war of aggression on Ukraine triggered massive price increases. But even before that, there were high inflation risks due to the Corona pandemic and creeping deglobalization. How should governments and central banks respond now?

IW

More about this topic

Content element with id 8880 Content element with id 9713