In his press conference on October 9, a tired but clearly contented Maroš Šefčovič appeared on camera to share the news that Beijing had agreed to moderate its exports of hybrid and plug-in hybrid vehicles. It was, the European Trade Commissioner added, “the first time that China has accepted to moderate its exports without going through the phase of prior trade tensions.”
The concession has not yet been fleshed out. It appears to work as a quota—reportedly enforced by Brussels and applicable to all hybrid imports—allowing Beijing to maintain that it never agreed to the “voluntary export restraint” it denounced in September as a violation of World Trade Organization (WTO) rules.
The deal’s detractors may point out that Beijing simply chose, at a relatively low cost, to co-own a measure it knew was coming. They might also note that the agreement barely scratches the surface of a €360 billion trade deficit.
More convincingly, they could argue that a concession timed to land just days before this week’s European Council summit (October 15-16) was not really about hybrids, but about buying time. If it successfully dampens the EU’s appetite for a fight, it will count as a strategic victory for Beijing.
A Tougher Line Works
But instead of taking the win and shelving the tougher trade measures proposed in the Franco-German letter sent to Brussels last week, the European Union should read the concession as evidence that a tougher line works.
An agreement on hybrids is more than many would have hoped for at this stage—after only the second regular meeting of the EU-China Trade and Investment Consultations (TIC).
The EU appears to have secured the substance of its opening ask, while Beijing—though it frames the deal as a non-discriminatory “upward arrangement” on 2025 levels—has accepted the kind of export constraint it was decrying only weeks ago.
Even if the concession was a pre-emptive move against measures Beijing saw as inevitable, it at least signals that Beijing has begun to take the EU at its word.
In a forthcoming paper on EU-China trade tensions, published jointly by Sinification and the Friedrich-Ebert-Stiftung and drawing on almost 400 Chinese authors, we found a nascent tendency to see Brussels as a meaningful strategic actor.
This finding contrasts with a baseline view of the EU as—to sum up crudely—a fragmented, declining bloc of marginal geopolitical relevance, whose rhetoric on China outpaces its capabilities. Beijing supports the EU’s “strategic autonomy,” but tends to equate it with a pro-China line. Even now, against the backdrop of deteriorating transatlantic relations, many analysts read European hawkishness as following Washington’s lead.
Seeing Europe Separately
But since late 2025, and more clearly since the summit meeting between Chinese President Xi Jinping and US President Donald Trump in May 2026, a growing strand of analysis is treating the hard line as Europe’s own. This is partly because analysts spend more time describing EU tools, necessarily portraying a more activist EU. But across multiple readings—and in part owing to a relative absence of content portraying the US as lead—there appears to be a growing recognition of the EU as an actor that drives forward China policy of its own volition.
The paper also finds that, while Chinese analysts sometimes appear relatively relaxed about the threat posed by the EU itself, they are less than sanguine about the wider international consequences of China’s trade surplus. They express confidence in Beijing’s ability to win a trade war against the EU—after all, they see themselves as having triumphed against the US—but they are worried about the EU’s potential to galvanize a broader front of resistance, especially among countries in the Global South.
Finally, it is noticeable that Chinese macroeconomists write more openly about China’s trade surplus than Chinese Europe experts do. Chinese analysts widely deny the role of subsidies, but Beijing’s own diagnosis of “strong supply, weak demand” accepts the premise of overcapacity, and economists increasingly link that overcapacity to the trade surplus—some even acknowledging China’s share of responsibility for global rebalancing.
The imbalance, in other words, is more widely recognized within the Chinese establishment than the extensive rebuttals in official discourse suggest. And with Beijing’s own campaign against “involution”—destructive price wars and excess capacity at home—there are domestic incentives to address it.
A More Amenable Beijing
All this—the new, tentative appreciation of European power, the concerns about global export markets, and the implied acknowledgement of a shared problem—leads to the conclusion that Brussels should expect a more amenable Beijing, less inclined than some might assume to make an example of the EU.
Despite considerable confidence in China’s relative strength, analysts do not argue for exploiting that advantage aggressively. The debate is not hawkish, and the dominant counsel is for restraint and calibrated retaliation, with an expectation of manageable conflict running alongside negotiations.
Although Beijing does believe it can win a trade war with Europe, it will be reluctant to fight one. China’s economy faces significant headwinds, and Beijing has other pressing concerns—in the Middle East, with Japan, and across the Taiwan Strait. Meanwhile, the Chinese leadership has doubled down on export-led growth and it desperately needs open markets. Whatever it thinks of Brussels’ geostrategic relevance, it knows how important the single market is to Chinese firms. In short, it has every reason to avoid an escalation in tensions with its second-largest trading partner.
Meaning Business
This diagnosis appears to have held up so far. Following this latest concession, however, it is possible that Beijing might read a strong response from the European Council as a rebuff warranting tough countermeasures. Although the jury is out on how significant the quota agreement truly is, Beijing is likely to see it as a substantial peace offering.
This risk exists, but it should not stop Brussels from pursuing its legitimate interests. The combination of staying at the table while preparing tough trade-defense measures has clearly yielded results already.
As Šefčovič himself noted, this is “only a first step,” and the main lesson Brussels should draw from the latest round of negotiations is that a tough, unified approach may finally be convincing Beijing that the EU means business.
Jacob Mardell is Lead Analyst at Sinification, which tracks and analyses debates shaping thought and policy in China.
