By Philip Blenkinsop and Kate Abnett
BRUSSELS, Oct 15 (Reuters) - European Union leaders convene in Brussels on Thursday for a packed summit to debate how best to curb surging exports from China blamed by industry groups for factory closures, how to cope with high energy prices and how to bridge wide differences over the future EU budget.
The leaders from the EU's 27 members meet less than a week after the European Commission secured an agreement with Beijing to limit imports of hybrid cars from China.
It is a first step in what the EU hopes will be a broader plan to rein in the bloc's goods trade deficit with China that hit €360 billion ($400.4 billion) in 2025 and is on course to surpass that level this year. The next EU-China meeting is planned for March.
Draft conclusions from the summit indicate leaders will request the EU executive, the Commission, to continue its dialogue with Beijing, while also making full use of EU trade defence measures and adding new trade instruments to protect the bloc further.
"These imbalances are not limited to one sector. We don't have much time because every month that goes by, thousands of jobs are lost," a senior EU diplomat said.
The summit comes as the bloc grapples with rising economic anxiety, which far-right parties are exploiting in elections. EU leaders tasked the Commission in June to produce concrete results in trade talks with Beijing by October. The hybrid cars deal was a first step, but the broader imbalance — spanning chemicals, steel and machinery — remains unresolved.
Beijing has said that hyping up the issue of economic imbalances is an excuse to promote protectionism and exert pressure on and restrict China.
GERMANY MAKES U-TURN ON CHINA IMPORTS
Franco-German proposals released last week are likely to be the focus of discussions. The EU's two largest economies said there was an urgent need for measures to deal with imports of chemicals and PET — the plastic widely used in packaging — and called for measures to retaliate quickly against countries that harm the bloc. An investigation into PET is expected to begin soon.
The paper marks a sharp turn for Germany, which only two years ago was the most vocal critic of EU anti-subsidy tariffs on Chinese electric vehicles.
The summit will kick off at 10 a.m. (0800 GMT) with a broad debate about EU competitiveness, of which relations with China are part. Several EU countries have also put high energy prices on the agenda, which the draft conclusions call an issue of "critical importance."
The conclusions point to proposals already made by the European Commission, such as a one-year delay to the EU's methane emissions rules for oil and gas imports and ask the EU executive to come up with further short-term measures.
EU leaders will also on Thursday discuss the bloc's next seven-year budget, which requires unanimous approval and often produces the EU's most divisive negotiations between net contributors and net recipients. The 2028-2034 budget is no different, with a special summit set for late November to try to reach agreement.
One of Friday's main topics will be the challenges facing Ukraine, with President Volodymyr Zelenskiy due to attend. Leaders are likely to discuss Ukraine's funding needs for 2027. The draft conclusions indicate leaders will also express regret over the US decision to temporarily lift sanctions on Russian diesel.
US President Donald Trump said at the weekend Zelenskiy should be replaced as Ukraine's leader. Zelenskiy received a strong show of support in London on Wednesday.
($1 = 0.8991 euro)
(Reporting by Philip Blenkinsop and Kate Abnett in Brussels; Additional reporting by Andrew Gray, Julia Payne, Amina Ismail, Lili Bayer, Andreas Rinke, Michel Rose and Victoria Waldersee; Editing by Matthew Lewis)
