Merkel says EU doesn't want trade war with China

German Chancellor Angela Merkel urged China to speed up reforms in the steel industry and other economic sectors to avoid a further rift with Brussels. Beijing is waiting for the EU to give it market economy status.

In a speech to the Chinese Academy of Sciences in Beijing Sunday, Merkel said “No one is interested in increased trade wars. But we must also talk openly about the remaining issues,” referring to China’s overproduction of steel, which is being dumped on the international market, DW reported.

Warning that over capacity was causing a big headache for Europe’s steel industry; she told the audience that “we must have a level playing field.”

China has promised reforms of its heavy industries, but several countries claim Beijing is stalling, because the changes will result in hundreds of thousands of job losses.

Beijing is urging Brussels to recognize it as a market economy – a pledge that was promised when China joined the World Trade Organization 15 year ago. The confirmation is expected in late 2016 but some EU states are hesitant to change the bloc’s trading status, given China’s ongoing overproduction in several sectors.

Merkel also called on Beijing to play a larger role in solving international crises, telling her student audience that “Economic strength brings a greater responsibility.” She urged China’s leaders to maintain the rule of law domestically and internationally, referring to territorial disputes with neighbors in the South and East China Sea.

The German leader also called for an improved legal framework in China to allow German companies to invest more easily in the country. She also raised concerns from Germany’s IT sector about Chinese cyber espionage, adding that closer cooperation could only be achieved if the issue was tackled.

Merkel arrived in China on Sunday for the fourth Sino-German joint cabinet meeting, attended by ministers from both sides.  

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