Xi Jinping’s trip to Europe this week, his first in half a decade, underscored the degradation of China’s diplomatic rapport with Europe since 2019. This is due to strain over commercial matters and the Ukrainian conflict. Although significant disagreements persevere, European leaders didn’t shy away from expressing their profound misgivings.
Xi’s choice to tour countries like France, Serbia, and Hungary mirrors Beijing’s eagerness to foster strategic autonomy in Europe and promote policies independent of American influence. France has traditionally been the dominant proponent of such strategies within the EU, while Serbia and Hungary maintain especially close ties with China in the region.
Xi’s tour commenced in Paris, where he met with Commission President Ursula von der Leyen and French President Emmanuel Macron. The EU leaders communicated their apprehension regarding China’s manufacturing surplus and asserted that Europe wouldn’t tolerate a surge of inexpensive Chinese imports, like electric vehicles, that could harm its domestic industries.
China previously received a similar caveat from Janet Yellen, the US treasury secretary. Likewise, some nations in the Global South have shown anxiety over this issue, implying that China maintains an edge through innovation and bulk production.
A potential strategy for China is to replicate the tactics of Japanese automakers from years past and establish factories in Europe. China’s leading EV producer, BYD, already has operations in Hungary, and countries like France have indicated they would welcome more Chinese companies.
As the EU shifts from pursuing more market presence in China for European firms to safeguarding its own industries, the Commission possesses potent devices to aid its cause. However, member-states aren’t united on this front. Specifically German car manufacturers are wary of Chinese retaliation, such as tariffs or similar counteractions, which could hurt their businesses.
Although Xi postponed initiating sanctions on French cognac, Beijing might target European food and drink sectors in a trade war scenario. To prevent such escalation, China, given its historical ability to minimise manufacturing output when crucial, ought to be persuaded to do so once more.
The biggest blow to the rapport between China and the European Union has been the result of Russia’s aggressive conflict with Ukraine. Despite its official stance of neutrality in the dispute, Beijing has extended both economic and diplomatic backing to Vladimir Putin, with whom Xi shares a strong political bond. In the aftermath of their meeting, Macron disclosed that Xi assured not to endorse Russia with armaments and to scrutinise the export of goods with dual purpose that could strengthen Putin’s war arsenal. Yet, the crucial measure he ought to take is aiding to convince Putin to cease the war and engage in discussions to reach a peaceful resolution.