Is the EU hatching a new weapon for dealing with Chinese overcapacity?

Mysterious gathering of officials and experts shows Brussels believes it needs more tools to tackle China trade issues

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EU lawmakers have narrowly approved European Commission President Ursula von der Leyen’s team for her second term in office. Photo: EPA-EFE

Published: 7:00pm, 29 Nov 2024Updated: 7:17pm, 29 Nov 2024

European Union lawmakers narrowly approved European Commission President Ursula von der Leyen’s team for her second term in office on Wednesday, but it was a mysterious event in Brussels last week that gave a better indication of where she plans to go on China policy over the next five years.

In an auditorium tucked away in the bowels of the commission’s Charlemagne building, guests gathered last Friday for the clunkily titled “High-Level Forum on Global Non-Market Overcapacity”. For those not fluent in EU-speak, this means China.

The EU’s civil service flew officials and experts in, at von der Leyen’s personal invitation, from around Europe and the United States for a full day devoted to Chinese overcapacity – an issue former trade chief Valdis Dombrovskis described as a “significant threat”.

“From steel and solar panels to shipbuilding and the automotive industry – this is not an abstract challenge, it is reality. And for many businesses, both in Europe and within our partners, it is an existential challenge,” Dombrovskis said.

Over the day, speakers thrashed out ways to define the problem, and proposed ideas for how to deal with it. The fact that the commission even held this forum spoke volumes about von der Leyen’s ambitions: she is laser-focused on China and is looking for new ways to crack down on its economic overflows.

But it also showed that Brussels believes it needs a new weapon – an “overcapacity instrument” – and that its army of bureaucrats is already analysing what that might look like.