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China Bashes EU Greens

China is tightening the screws on Europe in the trade war over environmental regulations for airliners. Following Europe’s announcement that airline carriers–foreign carriers included—would be forced to buy expensive “carbon offsets” for planes traveling to EU member states, China responded by putting plane orders from a number of European aerospace companies on hold. This has prompted these same companies to put pressure on EU regulators to relax these restrictions; the FT reports that a group of European air companies, led by Airbus, have inagurated a letter-writing campaign to European leaders urging them put the carbon offset scheme on hold for fear of lost jobs and revenues in European factories.

Once again, green overreaching looks like ending in debacle. Beyond the usual green follies, however, is a more important change—the rise of China and the decline of Europe. Not long ago Europeans would have laughed off Chinese complaints about domestic environmental schemes; today Chinese clout is such that even major European firms are joining it in putting pressure on continental heads of state. The change is dramatic. China has forced Europe into a corner; either give in to Chinese demands, or face the loss of business from one of the world’s largest economies. Things are changing.

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  • Jim.

    The gameboard is changing. The rules? Not so much.

    Question for the Professor of Strategy: How does a country win a trade war? It looks like China may well win this one. What can a country do to prepare for trade wars? How does one ensure they are limited, and not fights to the death?

    And it’s out of bounds to claim that there is no winning. Clearly, if the EU backs down, China will have won.

  • To my mind a more important question is why should we trust China?

    It is not the Chinese people we should fear but the form of their government. It seems naive to me, even foolish, not to insist on political reform in China if we are going to continue our trading relationship on favorable terms. The West still has leverage, but only if it acts collectively.

  • Corlyss

    “Once again, green overreaching looks like ending in debacle.”

    I’ll believe it when the EU backs down. Even Economist continues to beat the drum for emissions reductions, carbon credit and trading schemes, and speaks of the continuing threat posed by CO2. It must be some kind of loyalty oath that British journalists must take in order to practice their “trade.”

  • EuroCynic

    This pending trade war has less to do with green (as in environment) as it does with green (as in a new source of taxes) and protection of European carriers with the mechanism of distributing a free allocation of CO2 allowances. Foreign carriers, especially those who have been growing, will need to cover proportionally more of their operations with purchased allowances.

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