The European Union has reached a landmark agreement with China to cut Chinese hybrid car exports to the bloc by more than half, in what officials described as the first deal of its kind.

EU Trade Commissioner Maros Sefcovic announced the agreement at a press conference in Beijing on Friday, calling it the result of "intense" negotiations with China since June aimed at curbing a trade deficit of 1.18 billion euros a day.

The deal would reduce exports of plug-in and battery-powered hybrid cars by "several millions" over the next four years, Sefcovic said.

"It is the first time that China has accepted to moderate its exports without going through the phase of prior trade tension," he said, referring to the investigations normally required before safeguards under World Trade Organization rules can be applied.

China has been exporting large volumes of cars to Europe, including hybrids and pure battery electric vehicles, raising concerns among European manufacturers. Hybrids combine an internal combustion engine with a small battery and are marketed as a transitional step toward fully electric vehicles.

Sefcovic said Chinese officials had recognised the political pressure building across EU member states, with "literally thousands of job losses" at risk due to cheap imports from China across multiple sectors, including chemicals and textiles.

He said EU leaders were "clearly expecting very fast action" from the European Commission, and that Chinese counterparts had acknowledged that pressure.

"I am glad to say that the Chinese partners appreciated this very strong political argument, and therefore, we can proceed through the negotiated solution," he said.

Sefcovic cautioned that the agreement was only a beginning. "This is far from the end. It's a crucial first step, but only a first step," he told reporters in Beijing.

He also stressed the urgency of reaching a negotiated outcome, saying it was "very difficult to stop" a trade war once it had been declared.

Earlier in the week, senior EU officials had said they were travelling to Beijing to seek what they described as a "proof of concept" or pilot scheme in one sector, which they hoped could later be extended to other areas facing pressure from Chinese competition.

The agreement forms part of a 16-point framework under which Beijing and Brussels will continue negotiations on cars, export restrictions on rare earths, and greater access to the Chinese market for EU food and drink products.

China indicated that one mechanism for limiting hybrid car sales would involve setting higher minimum prices for Chinese vehicles sold in Europe, with both sides agreeing to adhere to "procedures concerning company price undertakings."

A statement from China's Ministry of Commerce said Beijing is "willing to continue facilitating the approval of export licenses for rare earths and permanent magnets destined for the EU."

The statement added that both sides had "reaffirmed their commitment to properly handle differences within the framework of WTO rules, and to continuing to stabilise and balance bilateral trade and economic relations."

Sefcovic is expected to brief EU diplomats in Brussels on Sunday, ahead of a leaders' summit scheduled for Thursday.