BERLIN — The European Union holds significant leverage over Beijing by controlling access to its market of 450 million consumers, according to German liberal MEP Engin Eroglu, chair of the European Parliament's delegation for relations with China. In an interview with Euronews, Eroglu argued that China's economic model is fundamentally unsustainable and that trade pressure could test the country's political stability.
His remarks come as tensions between Brussels and Beijing escalate. The EU set an October deadline for negotiations with China to address a trade imbalance that saw the bloc's deficit reach a record €1 billion in 2026. With low-cost Chinese imports flooding European markets, the European Commission has signaled it may impose unilateral measures—including tariffs and quotas—before a breakthrough is reached.
“If Europe were to restrict access to its market even slightly, Chinese domestic companies would be affected—especially since China's domestic consumption is stagnating,” Eroglu told Euronews. He added, “China's model is flawed despite dancing robots and great fanfare,” referencing the country's recent Lunar New Year gala featuring humanoid robots that drew global attention.
Leverage Through Market Access
According to Eroglu, if Chinese companies were forced to lay off workers due to EU restrictions, it could create political problems for the Chinese government. “There is already high youth unemployment. China's current self-confidence may not reflect the actual situation. This means that by controlling access to our market, we hold leverage over China,” he said.
The European Commission announced on Tuesday its intention to implement “unilateral” trade defense measures to protect EU industries from the surge of Chinese imports. These could include tariffs and quotas targeting sectors such as steel, cars, and chemicals, which have been under pressure since the US began closing its market to Chinese goods through tariffs in 2025. China subsequently redirected its industrial overcapacity toward the EU.
Data from Alicia Garcia Herrero, chief economist for Asia-Pacific at French corporate bank Natixis, shows that state-backed “zombie” companies accounted for more than 12% of all registered firms in China in 2026—more than double their share in 2018. A report from the Organisation for Economic Co-operation and Development (OECD) in early June also found that Chinese companies receive between three and eight times more subsidies than firms in OECD member countries.
Eroglu argued that this model undermines Beijing's claim to global dominance as it seeks to replace the US as the world's leading economic and political power through aggressive trade policies. “There is already high youth unemployment. China's current self-confidence may not reflect the actual situation,” he reiterated.
The European Commission could also impose new anti-dumping duties on Chinese products, as it has done in several cases in recent years. The number of unfair trade practice complaints filed by EU producers is rising, and for the first time, the EU's trade enforcement authority opened an investigation last Thursday into the agricultural sector by targeting China's Peking duck.
These developments align with broader EU concerns about China's strategic challenge. In a recent meeting, EU ministers labeled China a 'critical long-term strategic challenge', reflecting a growing consensus that the bloc must assert its economic sovereignty. Meanwhile, China's Q2 growth slowed to 4.3%, its weakest since late 2022, adding pressure on Beijing to maintain stability.
The EU's stance is part of a wider push for strategic autonomy. Former Italian Prime Minister Enrico Letta recently argued that national sovereignty is a 'gift' to the US and China, emphasizing that EU unity is the only path forward. As the October deadline approaches, the bloc's ability to leverage its market power will be a critical test of its resolve.
