Editorial: China Europe electric vehicle case 'soft landing' highlights the value of dialogue

Against the backdrop of intensified global geopolitical competition and a resurgence of protectionism, China Europe relations have once again demonstrated resilience. On January 12th, the Chinese Ministry of Commerce and the European Commission simultaneously announced the important consensus reached by both sides. The European side has officially released the "Guidance Document on Submitting Price Commitment Applications" (hereinafter referred to as the "Guidance Document"), and Chinese electric vehicle companies can submit price commitment applications based on the content of the "Guidance Document". This is the result of multiple rounds of consultations conducted by both sides with mutual respect under the strategic guidance of the leaders of China and Europe.

This is a powerful correction of zero sum game thinking by the rational and pragmatic spirit. Since the EU launched an investigation and announced tariff measures, bilateral economic and trade relations have faced a severe test. But China and Europe did not allow friction to slide into the abyss of a vicious cycle. Instead, they firmly implemented the leaders' consensus and successfully found alternative solutions through arduous but sincere professional consultations within the framework of WTO rules. The "Guidance Document" released this time not only preserves a compliant operational path for Chinese enterprises through the institutional arrangement of "price commitment", but also sends a clear signal to the world: in an era of mixed interests and competition, as long as mutual respect and rule orientation are adhered to, dialogue and negotiation are still the fundamental way to solve the zero sum game dilemma and maintain the stability of the global industrial and supply chains.

Rule orientation is the cornerstone of resolving friction. The biggest highlight of the outcome of this consultation is that both sides have always adhered to acting within the framework of WTO rules. In the Guidance Document, the European side explicitly promises to uphold the principle of non discrimination, apply the same legal standards to each "price commitment" application, and evaluate it objectively and fairly. The China Chamber of Commerce for Import and Export of Mechanical and Electrical Products has issued a statement, stating that this important achievement actively responds to the high concerns of the industry, including the automotive industry. The EU China Chamber of Commerce also believes that this will "significantly boost market confidence" and provide a more stable and predictable environment for businesses to operate and invest in Europe. The positive response from the market is the most genuine. The uncertainty of the past few years has caused difficulties for both the Chinese and European industries. The price commitment mechanism provides a predictable alternative solution, avoiding sudden surges in trade costs and market channel disruptions, and ensuring the normal business planning and operation of upstream and downstream enterprises in the industrial chain.

The deep embedding of the industrial chain is the cornerstone of cooperation. The progress made in this consultation is fundamentally determined by the mutually beneficial and win-win nature of China EU economic and trade relations, and it is the most powerful rebuttal to the concept of "de risking". The China Europe electric vehicle industry chain has already formed a deep integration pattern of "you in me, I in you". The competitiveness of China's electric vehicle industry stems from the scale and cost advantages formed by continuous technological innovation and fierce market competition. Forcefully 'removing risks' will sever the complete chain of Europe's own technological innovation, consumption choices, and energy transformation, and harm the vital interests of European enterprises and people. The Guidance Document specifically mentions that future investment plans of enterprises in the European Union will be included in the evaluation considerations. This detail is intriguing, as it actually acknowledges the positive significance of Chinese investment and technology in Europe's green transformation. Instead of building a high wall through tariffs, it is better to guide Chinese companies to invest in Europe through a price commitment mechanism. This can not only alleviate Europe's anxiety about "overcapacity", but also bring employment and technology spillovers to Europe, which is a typical "positive sum game".

If we broaden our perspective, the timing of the consensus reached between China and Europe this time is quite meaningful. Faced with the possibility of a resurgence of unilateralism and "America First" policies across the Atlantic, as well as the increasingly rampant trade protectionism worldwide, China and Europe, as the world's two major forces, two major markets, and two major civilizations, have a responsibility to provide more certainty for the global economy. Both parties have found a balance point through negotiation, which precisely demonstrates that recognizing differences, managing disagreements, and deepening cooperation are the true ways of "risk management".

In the future, China EU economic and trade relations may enter a new stage where "competition normalization" and "stable cooperation fundamentals" coexist. The policy inertia of "de risking" within the EU still exists, and various investigations into Chinese companies have not completely stopped. The proper resolution of the China Europe electric vehicle case still requires both sides to work towards the same goal. For the large ship of China Europe economic and trade cooperation, the "soft landing" of the electric vehicle case should become a heading calibration in the storm, which once again confirms a simple truth: "decoupling and breaking the chain" has no way out, and open cooperation is the right path. We hope that the European side can quickly translate the consensus reached in the China EU consultations and the commitments in the Guidance Document into concrete actions, jointly maintain the stability of the global automotive industry chain and supply chain, and inject new impetus into the stable and far-reaching development of the China EU comprehensive strategic partnership.