What is happening?
For the first time since 2019, the European Union (EU) and China held an in-person summit in Beijing on December 7. The key issues of concern for the EU included the China-Russia relations, including the EU’s opposition to exports of dual-use items from China to Russia, and structural trade imbalances. The summit took place amid high tensions in EU-China relations as Brussels remains increasingly frustrated about China’s support for Russia’s circumvention of EU sanctions, limited market access for EU companies, and Beijing’s growing belligerence towards Taiwan. As part of the summit, European Council president Charles Michel and European Commission (EC) president Ursula von der Leyen met first with Chinese president Xi Jinping (習近平) and then sat down with Premier Li Qiang (李強). The summit resulted in few deliverables, however, and the growing divergence between Brussels and Beijing on bilateral issues and international affairs was evidenced by the lack of a joint statement after the meeting.
What is the broader picture?
The EU-China relations are in a nadir as Brussels increasingly considers China a source of threats to its economic and security interests. China remains a focus of the EU’s efforts to de-risk its supply chains, as evidenced by the EU Economic Security Strategy announced by the High Representative of the Union for Foreign Affairs and Security Policy and the EC in June this year. Additionally, the EC started an anti-subsidy investigation into Chinese electric vehicles in October, which sparked backlash in China where the probe is considered to be “politically inclined”. Throughout the year, Beijing also tightened restrictions on exports of critical raw materials, including gallium and germanium used in semiconductor manufacturing and graphite necessary for the EU’s defense industry. At the same time, China embarked on a charm offensive ahead of the summit as it unilaterally waived visa requirements for citizens of France, Germany, Italy, the Netherlands, and Spain, and dropped trade measures imposed against Lithuania in 2021.
During the summit, the EU was able to amplify its concerns about imbalances in its trade relations with China and Beijing’s support for Moscow amid the ongoing full scale invasion of Ukraine. Charles Michel said, “As a permanent member of the UN Security Council, China has a special responsibility, because this Russian war threatens global stability and the world economy.” He also reiterated the EU’s opposition to China supplying any military tools to Russia and reiterated the importance of China’s compliance in preventing Russia from circumventing sanctions. EC President Ursula von der Leyen said the sides discussed root causes of their trade imbalance, from a lack of access to the Chinese market and preferential treatment to Chinese firms, to overcapacities in Chinese production. “Politically, European leaders will not be able to tolerate that our industrial base is undermined by unfair competition,” she said.
The summit resulted in few deliverables as both sides remain divided on how to address the gap between their positions on critical bilateral and international issues. No joint statement was issued, which is consistent with the announcements made prior to the event. Similarly, there was no agreement on how to productively address the issues related to European companies’ market access in China or Beijing’s tacit support for Putin’s regime during the war in Ukraine. The EU demonstrates willingness to engage with China on less sensitive issues including civil society and cultural cooperation, which is evidenced by the relaunching of High-Level People-to-People Dialogue (HPPD) next year. At the same time, the EU’s concerns about Beijing’s unfair trade practices and growing belligerence in the region, and China’s growing perception of the EU as increasingly protectionist, will remain difficult to resolve.
Why does it matter?
The EU continues to struggle as it seeks to develop a unified voice in approach to China. On the one hand, EC President von der Leyen remains determined to continue the reduction of the EU’s dependence on China through a series of de-risking policies. On the other hand, these efforts may be hindered by member states which fear the possible economic backlash from China’s response (e.g., Germany, Spain) or remain closely aligned with the authorities in Beijing (Hungary). This means that the space for productive engagement between the EU and China remains severely limited. The challenges resulting from this difficult relation should be addressed promptly and comprehensively by the new EC following the 2024 European Parliament elections.
