China, EU Should Avoid Trade Clash, Beijing’s Top Diplomat Says

(Bloomberg) -- China and the EU should find a way to avoid a confrontation over trade, Foreign Minister Wang Yi said — comments that come as a deadline to find solutions to the two sides' differences approaches.

"China and the European Union are comprehensive strategic partners, and a trade war should not be fought between them," Wang said in a call with German counterpart Johann Wadephul, according to a statement from Beijing late Monday.

Wang said he hoped Germany would "maintain a rational and pragmatic attitude," and encourage Brussels to "stay on the right track of open cooperation, dialogue and consultation."

The comments underscore mounting concern that China and Europe are heading toward a clash. For Beijing, the timing wouldn't be ideal considering it has similar friction with Washington. Chinese leader Xi Jinping is heading to the US this week to try to negotiate an extension to a trade war ceasefire with President Donald Trump.

EU leaders are set to meet in the middle of next month to discuss the trade deficit with China and possible new instruments they can use to strike back against Beijing's trade practices. Beijing and Brussels earlier agreed to set an October deadline to make progress on trade disagreements.

Earlier this month, EU trade chief Maros Sefcovic held a call with Chinese counterpart Wang Wentao to discuss the management of exports to the EU, European access to China's market and export controls of rare earths.

European Commission President Ursula von der Leyen has also warned that the bloc's trade deficit with China has reached a tipping point.

"Let me be clear: we will use all the tools at our disposal to rebalance our relationship," she said in her state of the union address earlier this month. "Words are good. But deeds are better."