Stakes are high as Chinese leader Xi Jinping hosts European Union leaders in Beijing for a closely watched summit Thursday, which could decide whether the two major economies will be able to resolve deep trade tensions – or see those spiral further.
The one-day gathering is the first in-person EU-China summit in four years and follows a terse and frosty virtual event early last year, later described by EU diplomat Josep Borell as a “dialogue of the deaf.”
Brussels arrived with a list of key economic grievances its leaders say they need to see addressed to smooth ties with their most important trade partner. Beijing, meanwhile, has been busy trying to shore up relations with its key trading counterparts and foreign companies as it struggles with mounting economic challenges at home.
“Standing at a new starting point for China-EU relations, we need to sum up historical experience … demonstrate wisdom and responsibility, and stay committed to the correct positioning of our comprehensive strategic partnership,” Xi told the leaders during a meeting at the Diaoyutai State Guesthouse Thursday.
The two sides should “continuously enhance political mutual trust,” “build strategic consensus,” and “remove all kinds of interference,” he stressed.
His words echoed comments from Chinese Foreign Minister Wang Yi earlier in the week, which touted the visit as a chance to “push China-EU relations to a new level with new prospects.”
Li Mingjiang, an associate professor of international relations at Singapore’s Nanyang Technological University, said the priority for Chinese leaders is to stabilize the domestic economy, and Beijing sees the EU as potentially playing a valuable role.
“China has strong incentive right now to further improve relations with European countries,” he said.
But expectations were low for major breakthroughs, given entrenched points of difference between the two sides, from economic relations to their starkly different positions on Russia’s war against Ukraine, which two years on China has yet to condemn.
On the table
The meeting comes amid Europe’s broad recalibration of its policy toward China. Earlier this year the bloc began its push to “de-risk” European supply chains from China and secure critical technologies amid rising concerns about Beijing’s global ambitions and economic practices.
Visiting leaders European Commission President Ursula von der Leyen, European Council President Charles Michel and top EU diplomat Josep Borrell signaled ahead of their visit that they were ready to press Xi and Premier Li Qiang on a list of economic concerns.
“China is the EU’s most important trading partner. But there are clear imbalances and differences that we must address. We both recognize the importance of de-risking and strengthening the resilience of our economies,” von der Leyen told Xi as their meeting got underway Thursday.
In the lead up to the summit, European leaders spoke frankly about their sticking points – and implied that they would take a harder line if progress wasn’t made.
Key among those issues is the gaping trade deficit between the EU and China, which Brussels blames on Beijing’s subsidies for Chinese companies and barriers to entry into the Chinese market.
Borrell last month in an address to EU ambassadors warned that “if China continues to deny the reality and consequences of this imbalance, it runs the risk of seeing a rising demand in Europe for more protection.”
In September, the bloc announced it was launching an investigation into China’s state support for makers of electric vehicles as soaring imports of their cars stoked fears for the future of European auto manufacturers.
China has slammed the move as a “protectionist practice,” claiming the rapid growth of its electric vehicle industry is down to “technological innovation, free competition and a complete industrial supply chain.”
It’s also pushed back on Europe’s “de-risking,” launching a diplomatic campaign criticizing the policy as illogical and politically motivated, with state-backed media taking aim at von der Leyen in particular for spearheading it.
In comments Thursday reported by state media, Xi also made an apparent reference to the policy, telling the visiting leaders: “We should not regard each other as rivals just because we have different systems, reduce cooperation just because there is competition, or engage in confrontation just because we have differences.”
Ahead of Beijing’s Thursday’s closely watched summit, analysts said Beijing may be willing to make some gestures toward further opening its market for European investment or addressing the trade deficit, but there were low expectations in Europe for any major progress.
“Europeans have come to realize the concrete outcomes will be limited. European officials and corporate people feel that (China’s) ‘open-door’ policy is no longer,” said Philippe Le Corre, a Paris-based senior fellow at the Asia Society Policy Institute, referring to perceptions that China is no longer a hospitable place for foreign business.
The visiting leaders were expected to reiterate throughout their visit that the “de-risking” policy to diversify supply chains does not mean they wish to decouple their closely connected economies. And both sides are also expected look for areas of collaboration.
“Von der Leyen and Michel are keen to maintain (open) lines of communication,” said Le Corre.
“(That’s) especially with the unknown result of the 2024 US elections — what if a new Trump administration was to come back with a trade sanctions policy against the EU? What if he was to disengage with NATO?” he said.
‘Constructive relationship’
For Xi, the meeting comes on the heels of a largely friendly summit with American President Joe Biden, where despite tensions the two sides reached significant agreements including on military communication and environmental protection.
Improving ties with Europe may be “even more important” for Xi, according to Steve Tsang, director of SOAS China Institute at the University of London. Amid competition with the US, Beijing is keen to not see the EU “side with Washington,” he said.
Over the past year, Chinese officials have made multiple diplomatic efforts to repair relations with Europe.
But even still, Xi “will not make major concessions to the EU without getting something big in return,” according to Tsang.
This month Beijing has appeared to make a goodwill gesture by allowing visa-free travel to passport holders from a handful of European countries including France and Germany. And in comments Thursday, Xi was quoted by state media as saying China was pursuing “high-level opening-up” and was “ready to regard the EU as a key partner in economic and trade cooperation,” though no further details were included.
Beijing’s crackdown on freedoms in Hong Kong, alleged human rights abuses in Xinjiang, and its handling of the Covid-19 pandemic had already strained ties long before China refused to condemn Russia’s invasion of Ukraine.
On Thursday, visiting European leaders had been expected to push Xi to ensure that Chinese firms are not supporting the Russian war effort. Unlike the US, Europe so far has refrained from blacklisting Chinese companies believed to be providing goods that could be used on the battlefield.
The two sides were also expected to discuss the ongoing conflict between Israel and Hamas militants in Gaza.
Beijing has not condemned Hamas for the October 7 attack on Israel that killed roughly 1,200 people and sparked the latest conflict – setting its stance at odds with Europe and the US. It’s instead focused criticism of Israel’s strikes on the enclave which have killed more than 15,000 people, according to the Hamas-run Gaza Ministry of Health.
Speaking to Xi and other leaders as the meeting began, von der Leyen called for an “end to the Russian aggression against Ukraine” and for all possible efforts to “work for a two-state solution in the Middle East.”
“As major powers in the world, the European Union and China have global responsibilities. We have a shared interest in peace and security,” the EU chief said.