China Prepares Strong Policy Measures Amid Escalating Trade Tensions

China is preparing to respond with 'strong policy measures' if the European Union imposes stricter restrictions on Chinese companies or products, according to a report by the Global Times. The report cited a Chinese observer who stated that China could use its 'policy toolbox' in response to potential EU restrictions.

The proposed EU tool, which mirrors the US Section 301 framework, would allow Brussels to investigate and respond to foreign trade practices deemed unfair or harmful to EU commerce. The Global Times noted that Germany and France are finalizing a joint paper calling on the European Commission to accelerate development of this instrument.

The Chinese Ministry of Commerce (MOFCOM) characterized the reported EU initiative as 'protectionist' and 'unilateral', stating it could disrupt China-EU trade and global industrial supply chains. MOFCOM emphasized that any solution should comply with WTO rules and domestic laws, while balancing the interests of industries on both sides.

The development follows growing trade tensions between Brussels and Beijing, with European Commission President Ursula von der Leyen citing the EU's trade imbalance with China and pledging to use available tools to rebalance the relationship. The commission has also proposed 'European preference' criteria in public procurement that could restrict access for third-country companies.