The relationship between the EU and the Middle Kingdom is complicated. On the one hand there is a lot of money flowing, on the other hand the dependence is enormous. The Union could be overwhelmed by it.
The EU has a large trade deficit with China that has been increasing for years. The Middle Kingdom reacted extremely angrily to attempts to gain more independence. When the EU commission focused on greater self-sufficiency in the wake of the corona pandemic, the Chinese ambassador to the Union immediately accused Brussels of raising trade barriers and thereby risking further disruptions to global supply chains.
Companies often can’t keep up
This behavior fits well with China’s aggressive stance. Corona has slowed down the Chinese purchasing policy somewhat, but company takeovers are now increasing significantly. In the EU’s internal market, European companies often have no chance to keep up with the competition from China when it comes to acquisitions or government contracts, because state aid flows there.
Complaints about unfair competition have been going on for years and discounts of up to 50 percent are not uncommon in public procurement. Current World Trade Organization rules cannot handle this. A new EU law must now put an end to such competition distortions. Accordingly, in the future, it should be allowed to prohibit companies from making acquisitions if they take advantage of unfair subsidies.
The pressure on the Union is increasing
Economists are calling for Europe to strengthen itself and work more closely with regions that share our global political position. But the dependencies are high: about 80 percent of all modules for the solar industry come from China. The pressure is mounting, especially in Germany the discussion flares up that companies – against their better judgement – are investing more in China.
Taiwan: Escalation would have serious consequences
In the conflict between China and Taiwan, there is growing concern about a serious economic war. Because more than 90 percent of the latest generation of chips is produced in Taiwan. If deliveries fail, many things won’t work the way they do now, experts warn.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
