China premier urges to ‘oppose decoupling’ at economic forum

China’s premier Li Qiang urged nations to stand against decoupling amid escalating economic tensions with the West, while the European Union (EU) gears up to levy fresh tariffs on Chinese electric vehicles.

“We should broadly open our minds, work closely together, abandon camp formations, (and) oppose decoupling,” said Li yesterday.

Li made these remarks while delivering a speech at the “Summer Davos” conference, part of the World Economic Forum, held this year in Dalian, northeastern China.

Tensions between the West and the world’s second-largest economy have escalated in recent years, especially as Beijing and Washington vie for dominance in advanced technology and emerging green industries.

The EU said that Beijing’s “unfair subsidization” of the electric vehicle industry poses a threat to European manufacturers. 

Decoupling refers to the process of separating the economies of two nations.

This mirrors accusations from Washington, which claims China aims to saturate the US market with heavily subsidized electric vehicles, solar panels, and other products.

Li refuted those claims.

Chinese EVs, lithium batteries and solar panels “first of all ensure domestic demand, while also enriching supply in the international market, easing inflationary pressure on the world and making a positive contribution by China to the global response to climate change,” he said, reported NST. 

“The rapid rise of China’s new industries is rooted in our own unique comparative advantages.”

He emphasized the importance of stable and efficient supply chains, as well as the liberalization and facilitation of trade and investment.

In the previous month, the United States increased tariffs on USD 18 billion worth of imports from China, focusing on key sectors such as electric vehicles, batteries, steel, and critical minerals. Beijing cautioned that this action would significantly impact relations between the two superpowers.

China is under increased scrutiny from the European Union, set to impose tariffs up to 38 per cent on Chinese electric vehicles by July 4. The EU cites concerns about unfair competition due to substantial state subsidies.

The duties are provisional and will become fully effective in November.

European leaders, including Commission head Ursula von der Leyen, have emphasized that the bloc’s goal is not to decouple from China but rather to “de-risk” its economy.

However, Beijing said that the impending tariffs are solely protective measures, contending that the success of its electric vehicle (EV) industry stems from innovation and supply chain efficiency rather than government support.

Earlier this month, trade officials from China and the EU engaged in discussions regarding the proposed tariffs and have committed to further consultations.