China, EU reach understanding on hybrid vehicle exports, avoid escalation after trade talks

Beijing and the European Union have reached an understanding on hybrid vehicle exports, according to a statement from China’s commerce ministry. The talks, which took place this week, are seen as a step towards avoiding "escalation" in various contentious disputes between the two parties. China’s Commerce Minister Wang Wentao and EU counterpart Maros Sefcovic described the discussions as "successful" and marked "a new starting point", demonstrating their willingness to manage differences through dialogue and consultation.

Sefcovic revealed that Beijing has agreed to moderate exports of hybrid vehicles to the EU, with projections indicating a reduction of over half in four years. The EU trade chief stated that the deal opens the prospect of cutting China's export of hybrids by more than a half, addressing one of the most controversial aspects of China's trade surplus with the bloc.

The issue is further complicated by accusations of unfair trade practices, including subsidies, price dumping, and currency manipulation from China. The talks also included discussions on electric vehicles and hybrid vehicles, with China committing to continue supplying vital items such as rare earth minerals to the EU. The next meeting between the two sides is scheduled for March.