European businesses feel 'ripped off' by China in trade, chamber says

European companies operating in China are expressing frustration, with the head of the EU Chamber of Commerce in China stating that the prevailing sentiment in Europe is that the continent is being "ripped off" in its trade dealings with Beijing. Jens Eskelund emphasized that this situation "must change."

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Currently the feeling in Europe is that we are being ripped off, and that is something that must change.

Eskelund's remarks come amid rising trade tensions between Brussels and Beijing. He described the current trade dynamic as "unbalanced," questioning the purpose of trade if it generates negative value for one party. While acknowledging that Europe is not protectionist, he stressed that the trade agreement, which has benefited both Europe and China for decades, is no longer functioning effectively.

Carlo D'Andrea, head of the chamber in Shanghai, elaborated on this point, noting that China's growing competitiveness extends beyond cheap products. It is now encroaching on sectors where advanced economies have traditionally held a strong position, such as automobiles, chemicals, and high-tech manufacturing, which are crucial for European employment.

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What we see clearly is that something is unbalanced. (...) If trade generates negative value for one of the parties, the question is: why trade?

Eskelund provided data to support his claims, pointing out that in the first quarter, Chinese exports to Europe grew by 18% while Europe's exports to China increased by only 2%. He highlighted the stark ratio of imports to exports, stating, "For every container that Europe exports to China, it imports four."

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The current position is no longer sustainable, especially because China is no longer just coming with cheap products but is going to erode the part of GDP where advanced economies were particularly strong: automobiles, chemicals, high-tech manufacturing... and it is something that generates millions of jobs in Europe.

Both Eskelund and D'Andrea expressed disappointment with China's potential retaliatory responses rather than engaging in constructive dialogue to address the underlying tensions. They suggested that European initiatives are largely mirroring restrictions already imposed by China on foreign companies. D'Andrea added that Europe had been "very naive" for many years, offering China a "five-star buffet," but that Chinese companies are now beginning to experience regulatory reciprocity.

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In the first quarter, Chinese exports grew by 18% to Europe, an economy with zero growth. European exports to China grew by 2%, to an economy that grew by 5%. Something is wrong. For every container that Europe exports to China, it imports four.