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Call for Beijing and Europe to Resume Investment Deal Talks Amid Trade Tensions
The former Chinese government minister, often dubbed the father of China's electric vehicle (EV) industry, has urged Beijing and Europe to re-engage in discussions for an investment deal to ease escalating trade tensions. These tensions recently saw the European Union consider imposing tariffs of up to 48% on imported EVs, which are viewed as politically charged and lacking unanimous support within the EU.
Trade Barriers and Geopolitical Stances
During the World Economic Forum’s Summer Davos event in Dalian, China, the former Minister of Science and Technology, who held the position from 2007 to 2018, argued against the proposed trade barriers, emphasizing China’s integral role in the global market. He acknowledged that not all EU countries are in favor of such tariffs. “China is already part of the global market, so there won’t be a consensus for erecting trade barriers,” he stated, noting that Germany is actively seeking to mitigate or soften these tariffs.
Recent talks between German Vice Chancellor Robert Habeck and senior Chinese leaders reflect Germany’s attempts to avert the tariffs' implications, which could adversely affect prominent German automakers such as BMW AG and Volkswagen AG. As a countermeasure, Beijing has suggested it might increase import taxes on large-engine vehicles from the EU to 25%. Additionally, China's Ministry of Commerce is investigating potential anti-dumping actions against European products like brandy and pork.
Political Motivations and Technological Innovation
The ex-minister emphasized that the EU tariffs are politically motivated, advocating for continued negotiations rather than confrontation, particularly against technological innovation. “Confrontation isn’t the way to go — it’s especially pointless to go against technological innovation. The most important thing is to keep negotiating,” he asserted.
Investment Imbalance and The Comprehensive Agreement on Investment
According to him, part of the EU’s anxiety stems from the disparity between Chinese foreign investment and its export pace. He suggested that resuming talks on the Comprehensive Agreement on Investment could improve relations. This landmark deal has been in a state of limbo since 2021 after the European Parliament decided not to ratify it. This decision came following Chinese retaliation against Western sanctions related to human-rights issues in Xinjiang, which included measures against 10 individuals and four entities from Europe. “It’s a big regret of mine, this deal,” he mentioned, stressing the necessity of reviving the agreement.
Influence and Legacy
Recognized as the architect of China’s EV policy, which has enabled the country to become a frontrunner in the EV sector, including design, manufacturing, and sales of electric cars and batteries, the former minister remains a significant influence in the field. Notably, he spent over a decade in Germany both studying and working for Volkswagen’s Audi brand, a background that underscores his call for negotiation and cooperation between China and Europe amidst mounting trade tensions.
