China, EU reach hybrid vehicle trade understanding, keep talks alive on EV dispute

China and EU Agree on Hybrid Vehicle Trade, Keep Electric Vehicle Talks Open

Key Developments in China-EU Automotive Trade Negotiations

BEIJING, Oct 9 (Reuters) - China and the European Union reached an "understanding" on trade in hybrid vehicles, the Chinese commerce ministry said on Friday, after two days of talks in which the bloc sought to reduce its trade deficit with Beijing.

European Trade Commissioner Maros Sefcovic has said he was seeking "tangible results" from his visit to China, amid the bloc's growing concerns over the gap, which amounted to over €1 billion ($1.12 billion) a day.

Details of the Hybrid Vehicle Trade Agreement

The understanding on hybrid vehicle trade in a WTO-compliant manner followed intensive negotiations, the Chinese ministry said, without giving details.

Asked whether the Chinese statement was a joint one, the European Commission said Sefcovic would comment on the talks at a press conference at 1300 GMT.

Rising Chinese Car Imports to the EU

CHINESE CAR IMPORTS TO EU HAVE RISEN SHARPLY

EU officials are concerned by the sharp rise in car imports from China. Imports of plug-in hybrids into the EU have increased 86% in the year to September, with a 20% decline in prices. More than half of these vehicles are now from China, while for 2025, China's share of PHEV imports was 30% in value terms.

Negotiations and Ongoing Dialogue

The discussions between Commerce Minister Wang Wentao and Sefcovic in Beijing on Thursday and Friday were "pragmatic and productive," the Chinese ministry said. 

China and the EU also agreed to continue discussions on price undertakings and review procedures related to the EU's anti-subsidy investigation into Chinese electric vehicles, according to the ministry. 

Broader Context: Trade Disputes and Future Cooperation

China and EU's dispute over cheap Chinese EV exports, dating to 2024, has clouded bilateral ties, and has since broadened to include sectors such as brandy, pork and dairy, as well as rare earths and critical minerals.

China needs foreign buyers for the flood of cheap, state-subsidised goods its own shoppers can't absorb, and the EU is torn between welcoming those imports to ease living costs and keeping them out to rebuild its own factories.

Next Steps in China-EU Trade Relations

Both sides will keep exploring the possibility of lowering tariffs on certain goods within the framework of WTO rules, and continue their dialogue on market access for medical devices, the Chinese ministry said. 

A third regular meeting of their consultation mechanism will take place in March 2027, and the two sides agreed to maintain communication, including a ministerial-level video conference in January, the ministry said.

Additional Information

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(Reporting by Qiaoyi Li, Yukun Zhang and Joe Cash; additional reporting by Philip Blenkinsop in Brussels; editing by Philippa Fletcher)