Xi Jinping’s visit to Europe this week, his first in five years, highlighted the deterioration in China’s relationship with the continent since 2019 amid tensions over trade and the war in Ukraine. But while the biggest disputes remained unresolved, the Chinese leader was left in no doubt about the depth of feeling about them among European leaders.
Xi’s decision to visit France, Serbia and Hungary reflects Beijing’s interest in encouraging European strategic autonomy and a policy approach independent of the United States. France has long been the most powerful voice in the European Union for such an approach while Serbia and Hungary are China’s closest friends in the region.
The visit began in Paris where Commission President Ursula von der Leyen joined French President Emmanuel Macron in outlining to Xi the EU’s concerns about Chinese manufacturing overcapacity. They told him that Europe would not allow a flood of cheap imports from China of products such as electric vehicles to damage its own industrial base.
Beijing received a similar warning from US treasury secretary Janet Yellen recently and some of China’s partners in the Global South have also expressed concernthere was a problem, insisting that China simply enjoyed an advantage due to innovation and economies of scale.
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One option for China is to follow the playbook of Japanese car manufacturers decades ago by opening factories in Europe. BYD, China’s biggest EV manufacturer, already produces cars in Hungary and France is among the countries saying they would welcome Chinese producers.
As the EU shifts focus from negotiating greater market access in China for European companies to protecting its industrial base, the Commission has powerful measures at its disposal. But the member-states are divided, with German car manufacturers fearful they will suffer from any Chinese retaliation to tariffs or other measures.
Xi paused the imposition of sanctions on French cognac but Beijing is likely to target European food and drink products in any trade war. Such an escalation should be avoided and since China has shown itself capable in the past of curbing manufacturing output when necessary, it should be encouraged to do so again.
The most serious damage to China’s relationship with the EU has been caused by Russia’s war of aggression against Ukraine. Beijing is formally neutral in the conflict but t has offered economic and diplomatic support to Vladimir Putin, with whom Xi enjoys a close political relationship.
Macron said after their meeting that Xi promised not to supply weapons to Russia and to control the export of dual-use goods that could help Putin’s war machine. But the most important step he should take is to help to persuade Putin to end the war and negotiate a peace settlement.