China and Europe agree to cut Chinese hybrid vehicle exports by half

[Hamartia Antidote]

China and Europe agree to cut Chinese hybrid vehicle exports by half

Europe's trade chief Maroš Sefčovič cast the two days of talks with China's Commerce Minister Wang Wentao in Beijing as a positive first step.

www.cnbc.com

• Europe’s trade chief Maroš Sefčovič cast the two days of talks with China’s Commerce Minister Wang Wentao in Beijing as a positive first step.
• The widening trade surplus between the EU and China has been a point of contention.

BEIJING — European trade commissioner Maroš Sefčovič said Friday that China has agreed to halve its exports of hybrid cars to the bloc.

Europe has called on China to voluntarily reduce hybrid car exports into the continent, but authorities in Beijing had reportedly slapped down the request, according to the Financial Times.

The widening trade surplus between the EU and China has been a point of contention, with Germany and France previously having called on Brussels to develop a “last-resort” trade instrument to address imbalances.

Sefčovič said Friday that the final decision would still need Brussels’ approval. Overall, he cast the two days of talks with China’s Commerce Minister Wang Wentao in Beijing as a positive first step, following a summer of rising tensions between China and the EU.

China’s Commerce Ministry on Friday released a list of 16 ”’consensus outcomes.”

They included licenses for rare earth and permanent magnet export licenses to the EU. Sefcovic did not elaborate on a timeline for the rare earth exports.

Earlier this year, on June 29 for the first meeting of the EU-China Trade and Investment Consultations.

The two sides agreed to next meet in March, with a video conference in January, according to the Chinese readout.

 

[Haz]

China and Europe agree to cut Chinese hybrid vehicle exports by half

Europe's trade chief Maroš Sefčovič cast the two days of talks with China's Commerce Minister Wang Wentao in Beijing as a positive first step.

www.cnbc.com

• Europe’s trade chief Maroš Sefčovič cast the two days of talks with China’s Commerce Minister Wang Wentao in Beijing as a positive first step.
• The widening trade surplus between the EU and China has been a point of contention.

BEIJING — European trade commissioner Maroš Sefčovič said Friday that China has agreed to halve its exports of hybrid cars to the bloc.

Europe has called on China to voluntarily reduce hybrid car exports into the continent, but authorities in Beijing had reportedly slapped down the request, according to the Financial Times.

The widening trade surplus between the EU and China has been a point of contention, with Germany and France previously having called on Brussels to develop a “last-resort” trade instrument to address imbalances.

Sefčovič said Friday that the final decision would still need Brussels’ approval. Overall, he cast the two days of talks with China’s Commerce Minister Wang Wentao in Beijing as a positive first step, following a summer of rising tensions between China and the EU.

China’s Commerce Ministry on Friday released a list of 16 ”’consensus outcomes.”

They included licenses for rare earth and permanent magnet export licenses to the EU. Sefcovic did not elaborate on a timeline for the rare earth exports.

Earlier this year, on June 29 for the first meeting of the EU-China Trade and Investment Consultations.

The two sides agreed to next meet in March, with a video conference in January, according to the Chinese readout.

Chinese brands have already been aggressively building up their local production capacity in anticipation of something like this, which was bound to happen.

Don't think it will change the overall trend for the EU market, but it'll help compensate for some of the thousands of auto industry jobs they continue to lose I guess.

 

[Hamartia Antidote]

Chinese brands have already been aggressively building up their local production capacity in anticipation of something like this, which was bound to happen.

I'm sure that is what the EU would prefer.

 

[ety]

The *Frankfurter Allgemeine Zeitung* (FAZ) highlighted a crucial question: against which year's export volume is the so-called 50% reduction measured? Šefčovič explained that the EU is utilizing trade forecasts for the coming four years, comparing the figures against the projected export volume that would occur in the absence of any corrective measures. Under this calculation method, the arrangement between the two sides is expected to reduce the number of Chinese vehicles entering the European market by millions. In other words, the "halving" in question does not mean slashing current Chinese vehicle export volumes by half; rather, it entails reducing the scale of future exports by 50% relative to originally projected levels.

There is a significant difference between the two. If a substantial increase in export volume was originally projected for the coming four years, then even if the anticipated growth is scaled back, the actual export volume could still exceed current levels.

Another detail worth noting is the public statements made by both China and the EU. The joint statement released by China’s Ministry of Commerce simply stated: "Following intensive consultations, the two sides have reached an understanding regarding the trade of hybrid vehicles in a manner consistent with World Trade Organization rules." The statement made no mention of a 50% reduction, nor did it disclose export quotas or implementation measures.

Therefore, what can currently be confirmed is that China and the EU have reached an understanding in principle regarding the trade of hybrid vehicles; however, the specific arrangements have not yet been officially disclosed and remain subject to further review by the EU. Šefčovič also noted that these negotiations are still far from a final resolution; this marks merely a crucial first step toward rebalancing China-EU economic and trade relations, rather than the end of the process.