The European Union and China have reached a provisional agreement to slow Chinese exports of hybrid and plug-in hybrid cars to Europe, after two days of talks in Beijing. EU trade commissioner Maroš Šefčovič, who met Chinese commerce minister Wang Wentao, spoke of "tangible results" and said the deal opens the prospect of cutting China's exports of such vehicles by more than half. Over the next four years, he said, that would mean several million fewer cars.

Šefčovič called it the first time China has agreed to moderate its exports without first going through the trade-defence investigations normally required under World Trade Organization rules. He said Beijing had recognised the political pressure in every EU member state, where "literally thousands of job losses" are feared as cheap imports arrive across sectors including chemicals and textiles. He stressed the deal is "only a first step". The two sides also agreed a 16-point framework to keep negotiating on cars, Chinese export restrictions on rare earths (minerals vital to electronics and clean-energy technology) and better access to the Chinese market for European food and drink.

China's commerce ministry confirmed an agreement but published few specifics. It said both sides would follow procedures on "company price undertakings" for hybrids, which suggests minimum prices for Chinese cars sold in Europe could be one tool. It also said China is willing to keep facilitating export licences for rare earths and permanent magnets bound for the EU, and that both sides would handle differences within WTO rules. The European carmakers' association ACEA welcomed the deal as a positive step but said it still needs to analyse the details.

The talks respond to a widening trade imbalance. The EU's deficit with China was about €360bn last year and now exceeds €1bn a day, according to the European Commission. Imports of plug-in hybrids from China rose sharply over the past year while prices fell, which European manufacturers say amounts to unfair competition, backed by state subsidies. Germany's central bank estimates the country is losing up to 15,000 industrial jobs a month, partly due to Chinese competition.

Sceptics note the limits of what has been announced. China analyst Bill Bishop described the results as rather "thin", and he doubts they will prevent escalation. Chinese commentary has stressed that trade imbalances are structural and require "strategic patience" from both sides. Reports also say Beijing earlier rejected a voluntary export limit, and that Brussels had been considering capping Chinese hybrid market share at around 15 percent. France and Germany have pushed for stronger EU trade-protection tools, and China's ministry has said it will respond firmly to any measures.

Šefčovič will brief EU diplomats in Brussels on Sunday, and Commission President Ursula von der Leyen will assess the outcome. Next steps are due to be discussed by EU leaders at a summit on Thursday. The deal matters as a possible template: the EU describes the hybrid car arrangement as a pilot that could be extended to other sectors under pressure from Chinese competition.