The European Union has warned that its economic relationship with China cannot continue in its current form, reports Bloomberg News. The bloc is weighing tougher measures to counter growing imbalances as Chinese products flood European markets.

EU commissioners met to discuss how to respond to rising competition from Beijing. The Commission stated that China remains a critical partner but added that 'the current state of the trade and investment relationship is not sustainable.' Officials noted that Beijing is increasingly shutting out foreign goods from its own market.

The debate reflects Europe's dilemma: protecting local industries risks retaliation from China, which remains a vital export destination. The Commission emphasized that economic and security interests are now intertwined and require a more robust response. Further talks are planned at the G7 summit in June and at an EU leaders' meeting in Brussels.

Germany has urged caution, with Economy Minister Katherina Reiche warning that EU measures must not harm European sales to China. France, Italy, the Netherlands, Spain, and Lithuania have circulated a paper calling for a new cross-sector trade defense tool.

Ahead of Friday's meeting, Beijing warned the EU against taking steps that could damage bilateral ties. The discussions highlight divisions among member states as Europe seeks to balance engagement with China against the need to shield its industries.