JAKARTA – The European Commission is preparing new rules that would require companies in the European Union to diversify their sources of strategic supplies in order to reduce dependence on China.
Quoted by Reuters, European Commission President Ursula von der Leyen said the measure is necessary because efforts by European companies to reduce the risks associated with dependence on China are still progressing too slowly.
She made the remarks during a meeting of European Union leaders in Brussels on Friday (19/6).
At the meeting, member state leaders also agreed to ask the European Commission to open discussions with key trading partners on global economic imbalances and assess whether new trade measures are required.
Although China was not mentioned directly in the official conclusions of the meeting, the issue remained one of the main topics of discussion.
De-risking from China
Von der Leyen said the European Commission would propose regulations to encourage supply chain diversification because the de-risking process from China has not shown sufficient progress.
The issue came to the forefront last year when China leveraged its dominance in critical mineral processing by imposing export restrictions on rare earth metals.
According to von der Leyen, the best-case scenario would be for European companies to voluntarily accelerate supply chain diversification, making the proposed regulations ultimately unnecessary.
“We need to make improvements. The data already shows the reality of the situation, and we need to rebalance this economic relationship,” von der Leyen said.
Earlier, G7 countries also agreed to strengthen cooperation to reduce dependence on critical mineral supplies.
In response, China urged G7 countries to respect market economy principles and international trade rules, rather than forming exclusive small-group alliances.
Several European Union diplomats said there is growing consensus among member states that the bloc’s trade deficit in goods with China has become a serious issue.
Currently, the EU’s goods trade deficit with China is estimated at around €1 billion, or approximately US$1.15 billion per day.
European Council President Antonio Costa stressed that relations with China remain important, but such a large trade deficit cannot continue indefinitely.
“We cannot keep raising this issue without tangible results. So far, unfortunately, China has not delivered the outcomes we had hoped for,” he said.
Meanwhile, Belgian Prime Minister Bart De Wever said EU leaders also agreed to strengthen solidarity in the event of retaliatory measures by other countries against the bloc’s trade policies.
According to him, the impact of such retaliation would not be felt evenly, as each country has a different level of vulnerability. (ARF/LM)