European firms urge revival of free and fair trade at China-EU summit

At Thursday’s China-EU summit in Beijing, European companies made one thing clear: trade imbalance isn’t just a numbers game—it’s a structural problem. Beneath the diplomatic overtures and reaffirmations of “partnership” lies a widening strategic rift. China’s posturing as an open, rules-based market rings increasingly hollow for EU stakeholders who continue to face asymmetrical regulatory barriers, restricted market access, and unpredictable policy shifts.

For years, the European Union tolerated the imbalance. Chinese firms enjoyed relative freedom to acquire, build, and operate across the EU bloc, while European firms were forced to navigate a fragmented and opaque regulatory system in China. That tolerance has now frayed. What was once framed as patience is now perceived as strategic naivety.

The most telling shift wasn’t the formal agenda of the summit—it was the language used behind closed doors. European industry insiders described a clear expectation: no more rhetorical reassurance, only structural correction. This change in tone is crucial. The EU is no longer content to manage the trade imbalance—it wants to reshape it.

That reshaping begins with reciprocity. European companies are demanding the same treatment Chinese companies receive in Europe. They want streamlined licensing, equal access to public procurement, and policy stability—none of which are guaranteed under China’s current economic management system.

What’s emerging is a narrative not of decoupling, but of strategic hedging. European leaders aren’t talking about pulling out of China—but they are increasingly planning around it.

Beijing’s standard response is to reiterate its commitment to reform and opening up. Yet, those words now carry diminishing weight. Chinese authorities continue to amplify internal consumption narratives, hint at self-reliance, and subtly tighten data, cybersecurity, and compliance restrictions—particularly for foreign firms. The result is a market that feels increasingly closed, even if it remains statistically “open.”

China’s uneven enforcement of antitrust laws and sudden regulatory campaigns (see: edtech, gaming, big tech) have heightened the sense of unpredictability. Add to that rising nationalism in consumer sentiment and the state’s growing influence in industrial planning, and foreign companies are forced to weigh not just profit potential—but long-term operational viability.

Contrast this with the UAE or Saudi Arabia, where Western and Asian firms alike have been courted with transparent regulatory reforms, fast-track licensing regimes, and long-term economic visioning. Europe’s engagement with China no longer reflects an exclusive strategic necessity. Gulf markets may not match China in size, but their regulatory clarity and reform momentum offer a counter-model—one that prizes execution over rhetoric.

This divergence matters. For global companies and investors, strategic exposure to China now comes with deeper questions about sovereignty risk, supply chain predictability, and the erosion of trust in policy signals.

The EU is quietly shifting from cooperative diplomacy to economic defensiveness. From the Carbon Border Adjustment Mechanism (CBAM) to the Digital Markets Act (DMA), Brussels is building a playbook of strategic autonomy. These are not symbolic moves—they’re signals that the EU is willing to use market size as leverage. And with the revival of anti-subsidy probes and FDI screening, the bloc is showing its willingness to rebalance trade on its own terms.

China, on the other hand, remains diplomatically skilled at stalling. It meets European concerns with warm language and vague commitments, but avoids codified reforms. That strategy may have worked a decade ago—today, it risks backfiring.

For global operators, this moment signals a deeper recalibration in China-EU trade. The friction is no longer cyclical—it is structural. And the risk is no longer just commercial—it is reputational and geopolitical. Firms that once positioned China as a central pillar of growth are now being forced to develop regional hedging strategies—not just for risk, but for relevance.

What’s unfolding isn’t decoupling in the traditional sense. It’s strategic drift: the slow divergence of economic systems that can no longer rely on shared assumptions of fairness, access, or mutual benefit.

This summit may not deliver any binding breakthroughs. But it does mark a turning point. The era of waiting for China to liberalize on European terms is over. The question now is not whether Europe will push back—but how far, and with what instruments.

China remains a critical player—but no longer an unquestioned partner. That is the real signal behind this week’s diplomatic theatre.