Germany’s mechanical engineering industry association, VDMA, calls on EU to reduce dependence on the Chinese market and improve access to new markets, raising the alarm regarding the growing challenges posed by China’s industrial policies.
As China continues to leverage competition-distorting advantages and government subsidies, European companies find themselves at a crossroads, demanding immediate action from policymakers.
“Our companies are ready to take on the competition with Chinese companies. We want to be successful on the global market based on our own strength,” VDMA President Kawlath said. “We are doing our homework. But that is not enough. We are calling on politicians to strengthen the location and ensure fair competition on the domestic market now.”
VDMA President Bertram Kawlath articulated the urgency of the situation during a recent media conference, where the association unveiled its position paper titled “Leveling the Playing Field: A Call for Fair Competition with China.” The paper outlines the pressing need for a united European front to counteract the unfair practices that have been undermining the competitiveness of local industries.
“Chinese companies are not playing fair,” Kawlath stated. “They benefit from substantial government support and often disregard our technical regulations, which puts our businesses at a significant disadvantage.”
According to VDMA European companies are eager to compete on fair terms but require better support from their governments. This includes implementing countervailing duties on imports from countries that violate EU antidumping or anti-subsidy rules and enhancing market surveillance to penalize non-compliance with EU legislation.
To avoid dependencies on China, the development of strategically relevant technologies should be supported by industrial policy. This could be achieved through non-price-related criteria in public tenders, exclusion criteria for market access and local content criteria but also concluding free trade agreements: There is an urgent need for the EU to conclude more free trade agreements, particularly with MERCOSUR and India, to improve access to new markets and reduce dependence on the Chinese market.
“We need new free trade agreements, with India, for example. The agreement with the South American Mercosur states has long been completed.
Now it must finally come into force,” Bertran Kawlath, VDMA President said.
The association also urged to promote standardization activities by European companies to avoid competitive disadvantages as China uses standardization as an instrument to implement its economic policy interests and is striving for global dominance of Chinese standards, VDMA said.
Platts, part of S&P Global Commodity Insights, assessed domestic HRC in Northern Europe at Eur600/mt ex-works Ruhr, and imported HRC in Northern Europe at Eur520/mt CIF Antwerp, both stable day over day.
