Summary of Key Points
On June 29, 2026, the first meeting of the China-EU Trade and Investment Consultation Mechanism was held at the EU headquarters, where both parties officially established this mechanism (comprising four areas: trade and investment balance, export controls, intellectual property rights, and WTO issues) and set up a joint monitoring mechanism. The meeting focused on topics such as market access, export controls, and industrial chain stability, during which they exchanged lists of market restrictions and agreed to gradually address their respective concerns. China expressed its concern regarding EU measures like the ban on inverter financing, emphasizing that it is a "partner in solving problems" rather than the "root cause of issues." The EU recognized China's key partner status and expressed willingness to manage differences through dialogue. Additionally, China and Germany restarted the China-Germany Economic Cooperation Joint Committee, with Germany expressing its desire to promote practical cooperation between the two regions. Overall, both China and the EU emphasized the mutually beneficial nature of their economic relations, rather than a zero-sum game.
I. The New Mechanism: A "Problem Solver" for China-EU Trade
The biggest achievement of this meeting was the official establishment of the China-EU Trade and Investment Consultation Mechanism, which provides a fixed platform for dialogue on trade and economic matters. The mechanism includes four working groups:
- Trade and Investment Balance: To address issues of who sells more and who buys less (for example, the EU feels it exports too little to China and wants to expand the market).
- Export Controls: To manage the export of key materials (such as rare earths) and ensure that technologies can be sold while avoiding supply disruptions.
- Intellectual Property Rights: To protect innovation and prevent piracy or infringement.
- WTO Reform: To jointly promote updates to global trade rules to make the WTO more effective.
A joint monitoring mechanism was also established, allowing for regular exchanges of trade data and tracking of commodity flows, which enhances transparency and reduces misunderstandings (for instance, concerns about Chinese product dumping or EU import restrictions). This mechanism ensures that economic issues are discussed in a structured and efficient manner, preventing minor issues from escalating into major conflicts.
II. Both Parties' Concerns
During the meeting, both sides presented their lists of concerns:
- China's Concerns: Recent EU policies may affect Chinese companies, such as the ban on inverter financing, revisions to the Cybersecurity Law, and the Industrial Accelerator Act, which could create barriers for Chinese tech firms. Minister Wang Wentao stated that China is not the problem but a partner in solving issues and warned against measures that could disrupt industrial chain stability.
- EU's Demands: The EU is concerned about a large trade deficit with China and aims to increase exports (e.g., of cars and high-end equipment). Commissioner Ševčović expressed no desire to escalate tensions and hoped to promote balance through the mechanism.
The parties exchanged lists of market restrictions, detailing areas where each side wishes to see progress. For example, China may seek relaxed import restrictions on its renewable energy products, while the EU may want China to open up more high-end service markets.
III. Key Areas for Cooperation
Several areas were identified for joint efforts:
- Industrial Chain Stability: There has been progress in discussions regarding export controls on key raw materials like rare earths, which are crucial for new energy and semiconductor production. China accounts for over 70% of global rare earth production, and both sides want to ensure a stable supply chain.
- Intellectual Property Protection: Both parties agreed to address systemic issues, such as improving enforcement and ensuring fairness in intellectual property laws (e.g., without targeting specific countries or companies).
- WTO Reform: Both China and the EU recognize the need for WTO reforms to address challenges in digital trade and subsidies, making the organization more authoritative and effective. They support using WTO rules to resolve disputes.
IV. China-Germany Interaction: Germany as a Key Player within the EU
The day before the meeting (June 28), Minister Wang Wentao met with German Economic Minister Scholz, who plays a leading role in EU economic policy. The two sides agreed to restart the China-Germany Economic Cooperation Joint Committee and establish two additional working groups for policy coordination and corporate dialogue. They also initiated discussions on export control regulations (e.g., how German companies can obtain permits to import rare earths from China). Germany expressed its willingness to deepen cooperation with China in areas such as supply chains and artificial intelligence, while hoping the EU would use the new mechanism to resolve any issues.
V. Experts' Views: The Fundamental Nature of China-EU Cooperation Remains Unchanged
Professors Zhao Yongsheng from the University of International Business and Economics and Shi Shiwei from the Free University of Berlin noted that the mutually beneficial nature of China-EU cooperation has not changed:
- China's Comprehensive Industrial Base: China covers all industrial categories in UN classifications and has developed complete supply chains in renewable energy (automobiles, photovoltaics, energy storage), with costs significantly lower than in Europe. This benefits EU countries in their green transition efforts.
- Non-Zero-Sum Game: Cooperation between China and Germany is mutually beneficial; for example, German car companies benefit from Chinese manufacturing and Chinese battery and solar technology suppliers contribute to their competitiveness. Both economies are interdependent.
Articles from the Chinese embassy in the EU also highlight that China-EU cooperation has shifted from simply selling products to joint industrial investment, which is welcomed by European countries. For instance, Chinese companies building photovoltaic plants in Europe creates local jobs and supports energy transition efforts.
Conclusion
The meeting sends a clear signal that both China and the EU are committed to resolving trade issues through structured dialogue. Although there are still differences (such as market access and control measures), both parties recognize that cooperation is more beneficial than confrontation. The positive momentum between China and Germany, in particular, adds stability to their economic relations. In the coming months, further consultations will be conducted on these four areas, with a ministerial meeting scheduled for autumn to determine whether these discussions can lead to concrete actions.