Can joint ventures fix China’s trade imbalance with the EU and US?
Chinese investment abroad is ‘only way’ to ease Beijing’s trade surplus, says leading researcher in wake of Brussels’ EV tariff vote
Encouraging Chinese companies to set up joint ventures abroad may be Beijing’s only way out of its trade imbalances with Western countries, according to a Chinese foreign trade expert.
He said one way to mitigate the problem would be to foster more joint ventures, which pool the resources of Chinese and foreign entities for a shared business or project.
“If there are more joint ventures or more investment [into these countries], on the whole, they will feel better because [they will think that although] we have a deficit, we have new investment, so that will make a little bit of balance,” said Huo, former president of the Chinese Academy of International Trade and Economic Cooperation.
While Beijing must maintain “friendly dialogue” with its trading partners about the trade balance, China should also open up more and “stimulate companies to invest abroad”, Huo said.
“That’s the only way to solve this problem,” he said in the round table event hosted by the Beijing-based Centre for China and Globalisation, a non-governmental think tank.
The round table came as Western countries continued to blame China for trade imbalances, accusing it of exporting its industrial capacity amid weak domestic demand since 2021, especially in the electric vehicle sector.
