The economic relationship between Brussels and Beijing has reached an explosive crossroads, marked by a structural goods deficit that has locked into historic dimensions. According to the latest data from the European Union’s statistics office, Eurostat, the EU’s trade deficit with China reached an unprecedented €31.9 billion in April alone, translating to roughly €1 billion every single day.
This commercial imbalance has transformed into a highly charged geopolitical liability. Highlighting the friction, European Commission President Ursula von der Leyen publicly warned that the economic relationship had hit an unmanageable inflection point.
“Europe’s economic relationship with China has reached an unsustainable point,” von der Leyen declared. “EU imports from China have risen 45% in five years… Europe must act now.”
Similarly, European Council President Antonio Costa reiterated that while the bloc favors engagement, the current dynamic cannot endure.
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“The EU will continue dialogue with China — but Europe cannot ignore the growing imbalance in its economic relationship with Beijing,” Costa stated, calling for an urgent assessment of the EU’s “trade-defence toolbox.”
The political friction intensifies because the imbalance is no longer driven by low-value consumer commodities, but by high-tech manufacturing sectors—such as electric vehicles, batteries, and communications technology—where Europe’s domestic industry is directly exposed.
Western partners increasingly accuse Beijing of utilizing massive industrial policy and unfair subsidies to create global market distortions. The International Monetary Fund (IMF) recently echoed these concerns, calling on China to halve its industrial subsidies, which it estimates amount to a staggering 4% of China’s GDP.
Delivering a direct keynote defense at the World Economic Forum’s “Summer Davos” in Dalian, Chinese Premier Li Qiang flatly dismissed the Western narrative. He argued that internal innovation, an integrated market of 1.4 billion people, and intense corporate research and development (R&D) are the true drivers behind China’s competitive edge.
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“The key to the competitiveness of Chinese products is not, as some people claim, that it relies on government subsidies,” Premier Li Qiang affirmed during his opening address. “The Chinese government is not that wealthy, nor can it afford them.”
Li further rejected alarms raised over surging exports, framing China’s high-tech boom as an empowerment mechanism rather than a economic threat.
“There are some people who see the nation’s high-tech boom as a threat… [but] China’s emerging technologies and products are bringing to the world not shocks, but opportunities,” Li noted.
