The European Union Chamber of Commerce in China (European Chamber) has called on Beijing to address the issues of price wars and over-intense competition in manufacturing. In a statement, the European Chamber notes that manufacturing production has outpaced the growth in consumption in China, leading to adverse competition, overstocked inventories, lower profit margins, underutilized assets, and mounting export pressures.
The Chamber has suggested that the Chinese government stimulate consumption to achieve a supply-demand balance. This has been echoed by US Treasury Secretary Scott Bessent, who recently suggested that China's next five-year plan should focus on "economic rebalancing."
The Chinese government will hold the 20th Central Committee's fourth plenary session in October, which will focus on the "15th Five-Year Plan" covering the period from 2026 to 2030. Previously, the Chinese government has voiced its opposition to excessive industrial competition, a stance supported by President Xi Jinping.
The European Chamber has also urged Beijing to establish fairer trade relations, allowing market forces to play a role in resource allocation, while calling for relaxed controls on rare earth exports to ease trade conflicts.
As noted by the Chamber, despite the agreement reached at the China-EU summit in July 2025 to establish a fast-track approval mechanism for rare earth export permits, its effectiveness remains to be seen. In terms of rare earth procurement, many small and medium-sized enterprises still face supply disruptions and lack long-term solutions.
China produces 90% of the world's rare earth magnets. After further restricting rare earth exports in early April, China's actions have already impacted businesses in India, Europe, and the US.
Article translated by Kevin Wang and edited by Jack Wu
