BRUSSELS: The European Union must act more forcefully to rebalance its trade relationship with China, the bloc’s executive said on Friday (May 29), after holding talks on protecting critical industries from Chinese rivals.

“China is a critical partner, and engagement and dialogue will continue. At the same time, the current state of the trade and investment relationship is not sustainable,” the European Commission said.

“As economic and security interests become ever more intertwined, both dimensions will require a more robust response,” it said.

The EU is increasingly concerned about its trade gap with China.

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The bloc’s trade deficit in goods with China hit 360 billion euros (US$419 billion) last year, meaning Chinese exports exceeded EU imports significantly.

European commissioners met to debate what measures – current and new – the EU could take.

But the EU said its “overarching approach remains de-risking, not decoupling”, as the 27-nation bloc wants to maintain trade relations with China while reducing its dependence on the Asian powerhouse.

The commission said the debate would “feed into work in the coming weeks” ahead of further talks on China and trade imbalances at the G7 heads of state meeting in France on Jun 15-17, and a meeting of EU leaders in Brussels on Jun 18-19.