Beijing's defensive trade stance is worsening EU relations, as Europe faces a massive trade deficit and job losses due to Chinese competition. China's recent paper, which defends its industrial policy and overcapacity, is counterproductive. The author argues Beijing should acknowledge the harm its export-driven growth causes and make conciliatory gestures, like reducing export tax rebates. This would pre-empt broader EU protectionist measures and demonstrate China's recognition of the problem, ultimately benefiting its long-term trade relations with its largest high-tech customer, the EU, avoiding a costly breakdown.