Description: Chinese Ministry of Finance has announced that European companies delving into the medical devices industries would be banned from selling products on the Chinese market as a countermeasure of Europe’s blockade on similar products from China. China previously decided to impose anti – dumping duties on European alcohol products and launched a review of European pork and dairy imports. European companies exceeding procurement targets of $6.28 million would be banned from Chinese markets except for the ones already selling and manufacturing products in China. Europe banned Chinese companies from participating in government contracts exceeding $5.89 million in Jun, prompting China to respond in an equal manner. The official statement from the Chinese Ministry of Finance accused EU’s trade practices of being isolationist and in violation of global trade practices.
Impact: Last week’s meeting between EU’s Chief of Diplomacy, Kaja Kallas and Chinese Foreign Minister, Wang Yi, has evidently reaffirmed trade differences and animosities between the world’s second largest economy and Europe’s bloc of countries. Both China and the EU are reeling from the pressure of the imposed US tariffs, with China recently pitching the expansion of a trade partnership with the Union. China managed to temporarily ease the pressure from the US, by alleviating rare earth mineral export controls and licensing, while the EU still faces growing uncertainties and higher tariff rates with the stalled negotiations. The clash between EU and China mostly benefits the US, which can pressure both towards conceding concessions imposed on the basis of the US national interests. Europe’s enclosed and highly regulated market space represents an ambitious target for the Chinese export driven economy, however, the latest development indicates more complex and broadened trade differences which are proving difficult to surmount.