Speech by President von der Leyen at the EP plenary joint debate on EU-China relations

Madam President,

Madam Minister 

Honourable Members, 

Indeed, we discussed today EU-China relations ahead of the China Summit where we will be with the Council President, António Costa. And therefore, let me complement what you said so that we have the whole view of the EU's position. This year marks half a century of diplomatic relations between our Union and China. And this has coincided with possibly the most remarkable chapter in China's long history. In just fifty years, its GDP has grown by more than ten times. Villages were replaced by megacities. More than 800 million people lifted themselves out of poverty. Once an agrarian society, China has become an industrial giant and a clean tech leader. Once an underdeveloped country, it has turned into the largest lender to developing nations. China has always been one of the great global civilisations. But in the last fifty years, it has also become one of the great global powers. 

Honourable Members, 

This makes our relationship with China one of the most defining and consequential for the rest of this Century. But our relations with China must be rooted in a clear-eyed assessment of this new reality. I have always said it: Europe is fully committed to results-oriented engagement with China. And this Commission is leading the way when it comes to de-risking not de-coupling. We, the EU and China, are two of the three largest economic and trade powers in the world. But we only trade some EUR 2 billion worth every day. That is only twice the volume we are trading with Switzerland. Because – while the Chinese market is enormous – our access to the market remains limited. The point here is that, while we are leading voices on global challenges, there are very real risks at play for Europe. These risks are both strategic and systemic in nature. They affect our security, and our competitiveness. These risks emerge from the fact that China has an entirely different system. And it has unique instruments at its disposal to play outside the rules. This, for instance, allows China to flood global markets with subsidized overcapacity – not just to boost its own industries, but to choke international competition. Finally, China has also become a formidable actor in the global information and cyber‑space. We very much welcome the voices of all Chinese on global issues of shared concern. But we will be very vigilant against any form of influence operations and cyber-attacks in Europe. 

Honourable Members, 

These realities do present a real challenge for Europe to confront. And we have started to address these challenges. Whether de-risking our economy and industry. Using our new toolbox of trade defence measures. Or diversifying our supply chains in sectors where China holds dependencies, if not outright monopolies. At the same time, I believe there is also an opportunity here, to build a more meaningful partnership with China. But to move our relationship forward, we need to make real progress – and find fair solutions – on the issues where we have been deadlocked for far too long. Predictability and reliability – this is how we can work in our mutual interest. And this is the message I will bring to the EU-China Summit later this month. 

Honourable Members, 

There are three priorities on which we need to focus on. First, rebalancing our economic relationship with China. Second, derisking. And third, advancing diplomacy on global issues, including climate. 

On my first point. China is running the largest trade surplus in the history of humankind. Its trade surplus with our Union has surpassed 300 billion EUR last year. And this is while it is getting harder and harder for European companies to do business in China. Our products are systematically discriminated in public procurement, because of Beijing's “Buy China” policy. Goods and services that are “made in China” get an automatic 20% price advantage in public bids. This is simply not fair. The system is explicitly rigged. So, we have taken action to rebalance the public procurement market for medical devices. Because it is a matter of basic reciprocity. Europe remains fundamentally open – but most of our companies are rapidly losing market share in China. We want to see tangible progress on our longstanding requests for market access.

The same is true on state-subsidised overcapacity. China cannot rely on exports to solve its domestic economic challenges. Overcapacity must be addressed at its source – it cannot simply be offloaded onto global markets. That is the clear message behind our investigation into electric vehicles. Interestingly, we see that a serious debate within China on excessive production, disorderly price undercutting and distorted market has started. They understand that a domestic challenge cannot be solved at the expense of others. Let me be clear: If our partnership is to move forward, we need a genuine rebalancing: fewer market distortions, less overcapacity exported from China, and fair, reciprocal access for European businesses in China. 

Honourable Members, 

The second priority is to speed up with derisking. China invested early in many of the technologies of the future. But then it started flooding global markets with cheap, subsidised goods, to wipe out competitors. Entire Western industries closed - from solar panels to mineral processing – leaving China to dominate. I have already spoken about China's domination of the rare earth permanent magnets market. And how that can be used for economic leverage. This is why we are developing alternative supply sources in close cooperation with our partners. Of course, dialogue with China is also essential. We are engaging with Beijing so that it loosens its export restrictions. Because as I said at the outset – we do not believe strategic decoupling is in our interest. I believe that for Europe, it would be inefficient and ineffective. But we will continue to de-risk. Because we have learnt the lesson. About the extent to which dependencies are vulnerabilities. And how tech, trade and security are inherently linked. Derisking is simply a matter of European independence. 

Honourable Members, 

My next point is on geopolitics. Security is more interlinked between the Euro-Atlantic and the Indo-Pacific than it has been in several generations. And it is evolving rapidly. So it is in our interest to work together. But we also know that China's unyielding support for Russia is creating heightened instability and insecurity here in Europe. We can say that China is de-facto enabling Russia's war economy. We cannot accept this. And I have always said: How China continues to interact with Putin's war, will be a determining factor for EU-China relations going forward. If China claims to defend the international rules-based order – then it should unequivocally condemn Russia's gross violation of Ukraine's sovereignty, territorial integrity and internationally recognized borders. And act accordingly. And if China claims to defend multilateralism – then it must respect the rules and principles of international trade, anchored in the WTO. 

Honourable members, 

My final point is about our cooperation to address climate change. While China is the largest emitter in the world with 30% of global emissions, clean energy also accounted for over a quarter of China's GDP growth. China invested over 900 billion dollars in clean technologies alone – more than the U.S., Europe, Japan, and India combined. Beijing is at once a staunch competitor in the clean tech race, and a vital partner for global decarbonisation. This is the complexity we must deal with. We must switch gear in our competition, but also explore every avenue for cooperation. We are both convinced that the triple planetary crisis of climate, biodiversity loss and pollution requires a strong multilateral framework. And we want COP30 in Belem to deliver ambitious results. We both see net-zero targets and policies as a growth strategy and a real driver for industrial modernisation. And we both see the opportunities to work closer together in sectors such as emissions trading, carbon capture and storage or the circular economy. 

Honourable Members, 

The point is that there is a lot that we can do together – if China is ready to work together in a spirit of predictability and reliability. Just like Europe, China is a continent-sized power. And just like our Union, it is a complex and fascinating giant. Our relationship must reflect this complexity. We will always defend our interests. We will de-risk our economies. But we do not want to decouple. As we enter our second half century of cooperation, China is changing. But this is also a new era for Europe – an independent Europe. We are ready to build a more balanced and more stable relationship. And write a new chapter in this defining relationship. 

Long live Europe.