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Beyond the €1 Billion a Day: What EU Trade Commissioner Maroš Šefčovič’s Beijing Visit Tells Us About the Pulse of EU-China Relations
October 13, 2026
The EU-China relationship is being tested in person. On 8 and 9 October, EU Trade and Economic Security Commissioner Maroš Šefčovič visited Beijing to meet Commerce Minister Wang Wentao for the second ministerial meeting of the EU-China Trade and Investment Consultation (TIC) mechanism. He arrived with a clear mandate and a ticking clock: tangible results that he can put in front of EU leaders when they meet in Brussels on 15-16 October.
The visit was also of high interest to other EU actors. The European Parliament recently added its weight to the matter, adopting its China recommendation on 7 October, which stressed the importance of dialogue on global issues but expressed concern for China’s economic practices.
From Brussels, this is the right moment to take the pulse of the relationship. The temptation will be to read it through the €1 billion a day trade deficit. But this is just the symptom rather than a diagnosis, and the relationship is broader and more interdependent than the deficit suggests.
The €1 Billion Question: Symptom, Not Cause
Over the past six months, China has moved from the elephant in the room to a fixture of the EU trade agenda. The trade deficit is the most-cited statistic used to explain what is happening in Brussels and what may happen next. But it draws far more attention than the deeper causes behind it.
The imbalance is not new. For a long time it was tolerated and even brought benefits such as helping to rein in inflation. The cry of “unfair competition” grew louder once China began moving up the value chain and winning market share in higher-end sectors where Europe has long had its champions, such as advanced manufacturing.
The wider geopolitical lens matters as well. Both Europe and China have long treated their relationship with the United States as their first diplomatic priority, and with each other as a secondary relationship. The 2025 tariff confrontation shows the cost: when China answered the Trump administration’s tariffs with rare earth export controls, European companies were hit harder than American ones by the resulting licensing delays.
2 Capitals, 2 Narratives
To understand what each side wants from the trade talks, it helps to set their positions side by side, including how each side sees the other, and what it is doing about it.
| Europe (towards China) | China (towards Europe) | |
|---|---|---|
| Trust level | Lack of trust | Conditional and reciprocal |
| Perception/Position | “A partner, an economic competitor, and a systemic rival” | No fundamental clashes of interest; partner for China’s modernisation |
| Thinking (author’s opinion) |
Trade relations with China shall not come at the expense of transatlantic relations; Growing cross-party consensus on addressing China’s trade policy |
(Widely seen as a “divide-and-conquer” strategy) Prioritising trade interests with individual member states while maintaining EU level talks |
| Narrative |
(Commission) “Our trade deficit with China is now €1bn a day. It has reached a tipping point. This is unsustainable. We will use all the tools to rebalance our relationship.”
(Council) “China’s asymmetric advantages with the EU, from trade imbalances to critical raw materials to technological advances in some areas, along with its willingness to use this as leverage against the EU and others in pursuit of its ambition of becoming the world’s leading power makes China a critical long-term challenge.”
(Parliament) “Europe needs urgent action against the weaponisation of EU economic overreliance on China and a rigorous de-risking strategy.” |
(All from China’s Ministry of Foreign Affairs) “Europe should naturally be a pole in a multipolar world.”
“Europe is an important force underpinning the stability of international order.”
“Europe is a key partner for China’s modernization.”
“The essence of China-Europe relations is mutually complementary.” |
| Action |
Maintain engagement and dialogue Build and strengthen trade defence toolkit (tariffs, anti-coercion instrument), but be WTO-compliant |
Maintain engagement and dialogue One-way visa-free policy up to 30 days for 35 European countries (including 25 EU member states, excluding Czechia and Lithuania) Strengthen supply chain security measures, export controls amid U.S.-China trade war and anti-foreign sanction countermeasures |
Table 1: How Europe and China See Each Other
The gap in tone is plain. Brussels speaks the language of rebalancing and de-risking, with a growing cross-party consensus behind it. Beijing speaks of partnership and reciprocity, and is widely seen as prioritising trade interests with individual member states while keeping talks at EU level going. Both, however, have kept the dialogue open, and that is what makes in-person engagements under the TIC framework possible.
An Exploration Still at an Early Stage
As geopolitics increasingly shapes trade and gives way to more transactional models, Europe and China are finally exploring how to approach one another outside the prism of the United States. Europe’s emphasis on strategic autonomy and China’s growing investment in other regional markets is proof. Cooperation between these two markets spans from high-level frameworks to decades-old industrial partnerships.
| Flagship partnerships (high level) |
|
|---|---|
| Cooperation initiatives (industry level lasting cooperation) |
|
Table 2: The Foundations of EU-China Cooperation
Why 2026 Has Been a Year of Intensive Engagement
The clock is ticking for both sides to work out how to cooperate. It is pressing for Europe in the near term because of the trade imbalance, and important for China in the medium to longer term, as it faces an ageing population and a services sector that has yet to match European levels of quality of life.
Against this backdrop, EU-China trade talks accelerated in 2026 and focused on tackling trade disputes. China hosted at least four separate trips by the European Parliament this year (IMCO, the Inter-Parliamentary Meeting, AFET and the INTA mission expected in late October), while Foreign Minister Wang Yi and Commerce Minister Wang Wentao stayed in close contact with EU institutions and member states. The ministerial TIC mechanism was set up in June. This week’s Beijing meeting is its second round and a third is scheduled for March 2027.
Delegation visits to China did not stop even over the summer, and engagement has reached the business world and academia. EU member state debate has heated up in parallel, including a non-paper by France and Germany calling for stronger trade-defence tools to respond more quickly to coercion or retaliation.
The Numbers Behind the Number
Despite the tensions, the economic relationship remains substantial. Two-way annual trade stands at around $1 trillion, with roughly three-quarters driven by Chinese exports and one-quarter by European exports. Chinese FDI in Europe (EU+UK) rose 67% in 2025 to €16.8 billion, its highest level since 2018, and Europe accounts for around 25% of China’s global outbound FDI.
Chinese firms have also established extensive R&D, design and manufacturing operations across Europe, contributing to employment and tax revenues. By the end of 2024, around 260,000 Europeans were directly employed by Chinese firms operating in the EU. For perspective, 32.9 million jobs in the EU were supported by exports to non-EU countries in 2024, or 15.0% of total EU employment.
The deficit alone therefore cannot define EU-China trade relations. Other agendas feed in as well: cooperation on transnational problems facing the planet, tech-enabled productivity (what Europe calls competitiveness and China calls new quality productive forces), AI ethics and AI for good, elderly care in ageing societies, and education and talent cultivation.
Why Trade Cannot Be Ring-Fenced
At the same time, these other agendas cannot be separated from trade.
Trade tensions already weigh on EU-China cooperation on climate change, the green transition and other areas of governance. Mutual mistrust and over-blaming, without facing difficulties head-on with home-grown solutions, will undermine a broader relationship in which trust has to be built over decades and will shape generations to come. Both sides’ calculation of gains and losses should include all of these factors, not just the trade figures.
What Beijing Delivered
So what did Šefčovič’s visit to Beijing produce? Many issues remain under negotiation, but the outcomes published after the second TIC meeting (8-9 October, Beijing) are pragmatic. Both sides committed to a structured process extending into 2027, with a ministerial videoconference in January and a third in-person ministerial TIC meeting in March 2027.
- Trade and market access. The most notable outcome is the agreement to explore tariff reductions on selected products, along with a reported understanding on hybrid vehicle trade. The two sides will continue discussions on EV anti-subsidy price undertakings, maintain dialogue on medical devices, pharmaceuticals and cosmetics market access, launch technical discussions on the EU Foreign Subsidies Regulation (FSR) and explore future investment cooperation. Together, these steps suggest a shift from managing individual disputes towards tackling broader market access and investment concerns.
- Export controls and economic security. Both sides agreed on several concrete confidence-building measures. China committed to maintaining facilitation for rare earth and permanent magnet export licensing through its existing “green channel”, while the EU indicated continued efforts with member states to facilitate certain dual-use licensing cases involving China. They will also discuss structural trade facilitation for compliant dual-use trade, and reached an understanding on greater transparency in export-control listing procedures, including advance notification before listings where possible within their legal frameworks.
- Regulatory cooperation and intellectual property. The launch of an FSR technical dialogue is particularly noteworthy: for companies exposed to EU subsidy scrutiny, it creates a formal channel to raise concerns and discuss implementation. The EU also clarified that its financing guidance on inverter projects is not country-specific, signalling a willingness to address Chinese concerns about how emerging economic security measures are interpreted. On intellectual property, both sides acknowledged progress on systemic issues and agreed milestone-based follow-up work through the EU-China Intellectual Property Working Group, focused on transparency, predictability, protection and enforcement.
- What it means for business. The key signal is not that major bilateral disputes have been resolved. It is that EU and Chinese authorities are increasingly institutionalising channels to manage trade frictions, export-control risks and market-access barriers before they escalate. For companies operating in both markets, the outcomes point to modest but tangible improvements in dialogue on EVs, hybrid vehicles, rare earth licensing, FSR implementation, medical products and dual-use trade. They also confirm that economic security and industrial competitiveness will remain central themes.
The Road Ahead: From Managing Disputes to Shaping Cooperation
The coming weeks will show whether retaliation measures or more frameworks for cooperation are ahead. EU leaders will weigh the Beijing outcomes at the European Council on 15-16 October, and the INTA mission to China follows in late October. The outcome of the Council debate will indicate how far member states want to lean on the toolbox and how far on dialogue.
Further, incremental but real de-escalation is possible if Europe and China can settle a few questions. From Beijing’s perspective, China wants to buy more European high-end equipment, not just agricultural products, if Europe is willing to sell. For Europe, the question is whether technology sovereignty means fully home-grown technology, or leaves balanced room for international cooperation. China can help Europe’s industrial transformation with affordable electrification products and broader digital solutions powered by AI. It can also bring industrial know-how built over decades of fierce domestic competition, in which its companies learned to raise efficiency and cut costs at every step of the supply chain. That can help Europe improve its own efficiency, if Europe welcomes these companies into its market.
The EU can approach this cooperation in a way that strengthens its competitiveness. Rather than stringent, one-size-fits-all “local content” or “made in Europe” rules, which often fail to suit every industry because supply chain configurations differ so much from sector to sector, Europe can protect its companies by encouraging industry-level cooperation such as joint ventures and other forms of exchange.
Šefčovič’s Beijing visit will not close the €1 billion/day gap. But it suggests that, beneath the noise, both sides are building the habit of talking before they act. As a Brussels-based adviser, that is the pulse I would be watching, far more closely than any single trade number.
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