The Chinese economy, dependent on industrial expansion and exports, shows concerns of overproduction. The United States and the EU urge China to focus on domestic consumption, but a rebalancing has not been achieved.
The competition for innovation exacerbates the global overcapacity in manufacturing, with China leading the market and creating imbalances. The excess of cheap goods generates trade tensions, especially between China and the US. This affects advanced economies such as the US and the EU, and industrial policies can exacerbate the problem with excessive subsidies.
The 25th EU-China Summit was cordial but lacked concrete solutions on trade and the war in Ukraine. The EU sees China as a partner, competitor, and rival, with the Comprehensive Agreement on Investment (CAI) suspended in 2021. Challenges persist in the trade balance and Chinese overcapacity, showing divergent priorities and complexity in bilateral economic relations.
