EU's 'de-risking' should not be de-Sinicization

It was positive that European Commissioner for Trade Valdis Dombrovskis vowed to strengthen the European Union's relationship with China to jointly solve global crises such as food security and climate change in his speech in Shanghai, ahead of the 10th China-EU High-Level Economic and Trade Dialogue that opens on Monday. That he also spoke of the need for the EU to "de-risk" was not.

Despite saying that the EU doesn't seek "decoupling", he complained that the EU has a trade deficit of €400 billion ($426.1 billion) with China. He has long insisted that the EU's trade deficit with China is too big and he reportedly plans to call for China to ease the limits on the EU's exports at the Shanghai dialogue.

But in saying so, Dombrovskis and those EU politicians holding similar views ignore the fact that the trade deficit is the comprehensive result of industrial structure, division of labor and other factors. The EU produces high technology, luxury goods and high-end agricultural products compared to China, which is lower down the value chain. This constitutes the basic scenario of their bilateral trade, namely the EU exports designer clothes and accessories, wines, and high-end electronic products to China while buying automobiles or parts and solar panels from the latter.