Europe and China don’t need a trade war, EU trade chief says

The European Union will not back down from protecting its industries against Chinese competition it sees as unfair, but mutual self-interest will prevent a damaging trade war, the EU’s trade chief Karel De Gucht said.

Disputes with Beijing have taken on a bigger scale in recent months and Brussels brought its biggest ever trade case against Beijing in September after European companies accused China of dumping solar panels in Europe.

The EU is also gathering evidence to see whether Chinese telecoms companies Huawei Technologies and ZTE are dumping or receiving illegal subsidies.

“We are not going to shy away from what we have to do,” De Gucht said in an interview.

“But we are not interested in escalating tensions. I believe that the Chinese also realise that this has to be kept within limits,” he said from his office in the European Commission.

The growing trade spats come at a dangerous time. Europe’s economy is hardly growing and the continent is suffering from record unemployment, while China’s much-faster growth is cooling. Both downturns raise the spectre of social instability.