EU developing new financial tool to reduce dependence on China

The European Union is developing a new financial instrument, informally called the 'solidarity instrument,' aimed at helping European companies reduce dependence on China and diversify critical supply chains, Bloomberg reports. The mechanism involves supporting businesses that are restructuring their logistics and seeking alternative suppliers. Amid the EU's trade deficit with China exceeding €360 billion, the bloc is also considering measures to boost exports of European goods to China and the possibility of introducing protective trade restrictions in response to pressure from Beijing. Substantial progress on the initiative is expected by October.