China says it reaches ‘understanding’ with EU on hybrid cars

The Chinese Commerce Ministry announced on Friday that an "understanding" had been reached with the EU regarding the export of hybrid electric vehicles. This development followed two days of talks in Beijing, the final leg of a month-long effort to address the EU's €1 billion-a-day trade deficit with China. According to a Chinese statement, both parties have agreed on a trade arrangement for hybrid vehicles that adheres to World Trade Organization rules.

The talks had centered on cars, as they emerged as a key issue in the lead-up to the visit by Trade Commissioner Maroš Šefčovič. His goal was to secure a deal that would avoid protective measures to shield the European market. Chinese car sales to the EU had been on the rise, accounting for one in eight vehicles sold in the bloc in August, primarily due to the surge in hybrid electric vehicle production.

Meanwhile, Europe's automotive sector, dominated by Germany, has faced challenges, with companies such as Volkswagen and Mercedes-Benz announcing job cuts and plant closures. For Šefčovič, a successful car trade agreement would be a significant accomplishment, considering his role in negotiating the EU's Brexit agreement and the recent Turnberry deal with the United States' White House.

He was anticipated to provide further details to reporters in Beijing shortly after the talks. The EU's leaders will assess the results of these trade discussions during their meeting in Brussels on the following Thursday.