China Rejects Zero-Sum Framing of EU Trade Relations

China’s Foreign Ministry on Monday firmly rejected the characterization of China-European Union economic relations as a zero-sum game, pushing back against Brussels’ intensifying efforts to “de-risk” its trade relationship with the world’s second-largest economy. Speaking at a regular press conference in Beijing, spokesperson Lin Jian argued that the two sides “can be mutually beneficial and achieve win-win outcomes.”

“As an old Chinese saying goes, do not do unto others what you would not have others do unto you. China-EU trade is not a zero-sum game. There is no reason why China and the EU can’t succeed together,” Lin said, according to Xinhua News.

The Context: A Widening Trade Deficit

The statement comes amid escalating trade tensions between the two economic powers. The EU’s goods trade deficit with China reached €360 billion in 2025, up from €312 billion in 2024, and has continued to widen in the first quarter of 2026. On May 29, the European Commission formally declared the EU-China trade and investment relationship “not sustainable” following an orientation debate convened by Commission President Ursula von der Leyen.

European Trade Commissioner Maros Sefcovic announced on June 5 that the Commission is weighing legislation that could force companies in sensitive sectors to diversify to at least three sources for critical supplies. The proposal is part of a broader package of economic security instruments Brussels is preparing, including revisions to the Cybersecurity Act (CSA2) and the Industrial Accelerator Act.

China’s Response: Market Logic vs. Protectionism

Lin Jian directly challenged the premise underlying the EU’s diversification push. “European companies make their choice based on cost, technology and efficiency. How is that ‘over-dependence’? Isn’t ‘diversification’ in this case just another version of protectionism?” he asked. “This sort of measures will not make the European industry more competitive, and they certainly go against the EU’s own stated principles of market economy, fair competition and free trade.”

China’s Ministry of Commerce had already warned on May 30 that if the EU introduces new trade instruments with discriminatory restrictions, Beijing will take “resolute countermeasures” to safeguard its interests.

Germany’s Pivot and European Concerns

A significant development in the dispute is Germany’s shifting stance. Traditionally cautious about provoking China due to its large export sector — particularly automakers — Berlin has signaled a greater willingness for the EU to take tougher action against Chinese imports. The shift follows warnings from the Centre for European Reform that Germany risks a “China Shock” similar to what the United States experienced in 2001.

EU Commissioner for Industrial Strategy Stéphane Séjourné captured the bloc’s hardening position, stating: “I think there is still a road to have a constructive dialogue with China, but we can’t let Europe be the victim of a predatory strategy that is destroying our industry. New tools, new measures, new political will are needed.”

The Stakes: 29 Million Jobs at Risk

The economic interdependence between China and the EU is profound. Some 29 million European jobs are linked to trade with China, while the EU remains China’s largest source of consumer goods imports, supplying over half of China’s cosmetics imports and nearly 60% of its car imports. A joint report by the China Chamber of Commerce to the EU and KPMG estimated that proposed EU cybersecurity rules (CSA2) could cost nearly €367.8 billion ($428.22 billion) if they force the replacement of Chinese suppliers across 18 critical sectors.

Chinese academics have cautioned that the EU’s approach may prove counterproductive. Dong Yifan, an associate research fellow at Beijing Language and Culture University, argued that the EU’s policy proposals, “while not naming China explicitly, are largely aimed at Chinese companies. Once implemented, they will disrupt existing industrial and investment ties and effectively shut many Chinese companies out of the European market.”

What to Watch For

Two upcoming events will test whether dialogue can produce concrete outcomes or if tensions will escalate further. EU leaders are scheduled to meet in Brussels on June 18-19 to discuss economic security, and an EU-China summit is expected later this month. China has expressed openness to establishing a trade and investment consultation mechanism, but has also made clear it will retaliate if the EU moves forward with what it views as discriminatory measures.

As Lin Jian put it: “The Chinese side is willing and open to working with the EU on trade issues. We hope the EU will work with the Chinese side to find solutions through dialogue and consultation, and let the business communities and people of both sides benefit even more from China-EU trade.”