German President Warns EU-China Trade Ties Cannot Run One Way

European trade imbalance with China is drawing fresh scrutiny after Germany's president used a Beijing speech Thursday to warn against one-sided dependence in commercial ties. Frank-Walter Steinmeier addressed students at Peking University on Oct. 29, days before a scheduled meeting with Chinese President Xi Jinping on Friday.

Steinmeier acknowledged China's stated aim of shielding its economy from outside disruption. "It is understandable that China wants to protect its economy against external shocks and negative influences," he said, while arguing that Beijing's pursuit of independence cannot leave other markets vulnerable to Chinese supply decisions.

The European Union has labeled its growing deficit with China unsustainable and said last month it would use every available tool to address it. Germany and France have jointly proposed a new rapid-action mechanism for the bloc to deploy against countries that damage EU interests, with China the likely focus.

Steinmeier said European firms face little or no access to China's market, while EU markets absorb large volumes of Chinese goods produced with state support. He also cited Beijing's controls and limits on raw material exports as a constraint on European industry.

The German president said Europe intends to retain its industrial base and expressed confidence that Brussels and Beijing could settle differences through talks. "We do not want a new bloc confrontation. That would not only be dangerous for international security, but would also be an economic loss for everyone," he said. Steinmeier's visit to China runs through Saturday.

He is scheduled to meet Xi Jinping on Friday.