The Chinese government rejected a proposal by the European Union to voluntarily cap its exports of electric vehicles to the 27-nation bloc amid the two parties' efforts to steer clear of a trade war, the Financial Times reported Wednesday, citing two diplomats.

EU Trade Commissioner Maroš Šefčovič called for at least one measure to reduce China's trade surplus with the bloc instead of retaliatory measures, including capping hybrid car exports to the continent at about 15% instead of more than one-third at present, the report said.

The European Commission is also mulling a temporary "safeguard" trade defense measure that could be triggered even without proof of market abuse, according to the report.

The European Commission and the Chinese Embassy in Brussels did not immediately respond to a request for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)