As Beijing and Brussels prepare for October talks on trade imbalances, an EU trade association has called for more concrete action, such as China shifting towards a more service-based economy, to address the country’s domestic supply-demand imbalances that have contributed to trade tensions.
The European Union Chamber of Commerce in China (EUCCC), which has more than 1,600 member companies, said persistent supply-demand imbalances had fuelled neijuan or “involution” – a form of excessive competition marked by sluggish demand, excess supply and eroding margins.
While China’s latest five-year plan has called for greater efforts to address these structural problems, the chamber said it hoped those commitments would translate into meaningful action.
“The Chamber hopes [China’s latest five-year plan] … can alleviate third market concerns over China’s increasing exports and the subsequent trade imbalances that have developed,” it said in its annual position paper released on Tuesday.