China warns EU not to ‘fantasise’ on trade approach as Brussels confirms new ‘kill switch’

Beijing warned Brussels not to “fantasise” that taking a hard line will force it into concessions, as the bloc confirmed plans for a gung-ho new kill switch that will allow Brussels to “immediately” kick China out of the single market.

Exactly a week after the two sides struck a surprise deal to restrict the volume of hybrid cars China ships to Europe, the flare-up suggests the threat of a trade war between two of the world’s three biggest economies has far from subsided.

“The EU should not fantasise about gaining benefits through pressure, nor should it underestimate China’s determination and ability to safeguard its own interests,” read a Ministry of Commerce statement on Friday.

The statement was in response to reports from the South China Morning Post and other media that Brussels believed that tough talk from Europe had forced Beijing to make a deal.