While the second meeting of the China-EU trade and investment consultation mechanism (TIC) was widely regarded as a success, neither China nor the EU hide their differences in narratives or industrial policy. This week, China and the EU not only bridged business visits and diplomatic dialogues, but also conducted trade investigations in the chemical sector. Engagement and tension coexist, with their intensity gripping the breath of executives, enterprises, and others.
Recent progress in China-EU trade negotiations has shown that pragmatic engagement can produce results. The understanding reached over hybrid vehicle exports and the progress made at the second TIC meeting offer reasons for optimism. Yet the broader economic relationship remains under strain, as differences over market access, industrial competition and trade policy continue to surface.
For China, the central issue is whether legitimate economic competition is increasingly being treated as a matter of economic security. Beijing has repeatedly called for an open, fair and non-discriminatory business environment, arguing that protectionist measures cannot address Europe’s underlying competitiveness challenges. Chinese Ambassador to the EU Cai Run reiterated this position in Brussels on 5 November, warning that China would take countermeasures if the EU continued to adopt restrictive and discriminatory measures against Chinese interests.
The EU, meanwhile, is preparing a new package of trade instruments, expected on 9 December. Trade Commissioner Maroš Šefčovič said the measures would enable the bloc to respond more rapidly to what it considers unfair treatment, including through restrictions on imports. The potential scope and application of these instruments, particularly the proposed mechanism widely referred to as a “kill switch,” will be closely watched by Chinese businesses.
China is also examining its policy options. In a recent discussion, Cui Fan, a professor at the University of International Business and Economics, outlined possible responses to discriminatory restrictions, ranging from anti-discrimination investigations to export controls and reciprocal trade measures.
Meanwhile, trade tensions are already extending into industrial materials. On 6 November, China’s Ministry of Commerce (MOFCOM) initiated anti-dumping investigations into EU-origin para-aramid filament yarn and ethylidene norbornene (ENB). The move followed growing trade remedy activity on both sides. According to MOFCOM, the EU has initiated 16 trade remedy investigations involving China since the beginning of 2026, nine of them concerning chemical products. Recent EU investigations have also targeted Chinese furfuryl alcohol and polyvinylidene fluoride (PVDF). On Friday, Brussels launched a safeguard investigation into PET resin chemicals.
MOFCOM stressed that China has remained prudent and restrained in its use of trade defense tools, urging the EU to address economic and trade differences through dialogue rather than protectionism. The two new investigations will proceed under established procedures, with their outcomes determined by the evidence.
For businesses, the widening range of trade measures highlights the importance of monitoring regulatory developments across sectors, particularly chemicals, automotive and critical materials. Chinese companies should pay close attention to the EU’s forthcoming trade package and the progress of ongoing investigations, while assessing potential implications for market access and supply chains.
Yet the picture is not exclusively one of mounting friction. The progress achieved through the TIC demonstrates that both sides retain the capacity to manage differences and identify practical solutions. The mechanism provides a valuable channel for addressing business concerns, reducing misunderstandings and advancing mutually beneficial cooperation.
The priority should be to build on this progress. China and the EU have substantial economic interests at stake, and neither side benefits from an escalating cycle of restrictions and countermeasures. Maintaining open markets, respecting legitimate business interests and making fuller use of dialogue mechanisms offer a more sustainable way forward than allowing economic competition to become a source of prolonged confrontation.
A China-EU medical device matchmaking event was held at the National Exhibition and Convention Center (Shanghai) during the 9th China International Import Expo (CIIE), a concrete follow-up to item 5 of the 16-point consensus reached at the second meeting of the TIC.
