EU-China Relations at a Pivotal Crossroads Amid Growing Tensions

The recent summit in Beijing marked a crucial moment for EU-China relations, as Ursula von der Leyen emphasized the need for balance in trade amidst ongoing tensions, particularly due to China's ties with Russia. Despite calls for collaboration, concerns over trade practices and geopolitical dynamics cast a shadow on future cooperation.

 

EU-China relations have reached an important crossroads, as European Commission President Ursula von der Leyen and Chinese President Xi Jinping engaged in discussions during a summit in Beijing. Von der Leyen stated that these ties are at an "inflection point," attributing deepening cooperation to increasing trade imbalances, particularly the European Union's substantial trade deficit with China. Highlighting the geopolitical landscape, she expressed concerns about China's close ties with Russia, labeling them as a "determining factor" influencing EU relations with China.

Xi Jinping countered that the issues facing Europe do not stem from China, urging EU leaders to “properly manage differences.” As the summit unfolded, it became clear that the hopes for significant resolutions were tempered, given the summit's length was reduced to just one day at China's request.

During meetings held in the Great Hall of the People, both leaders called for "real solutions" to achieve a mutually beneficial partnership, with von der Leyen stressing the need for both sides to recognize their respective concerns. From China’s perspective, Xi emphasized the importance of avoiding barriers to trade, warning that measures like decoupling and supply chain severance would lead to self-isolation.

The summit took place against a backdrop of mounting EU concerns, exemplified by last year’s record trade deficit with China, which reached €305.8 billion ($360 billion). Despite trade issues, von der Leyen noted that rebalancing requires increased market access for European firms in China and curtailment of overcapacity.

Following the summit, it became evident that the atmosphere was more tense than hopeful, especially after Xi's previous refusal to attend events in Brussels and his participation in Russian commemorations earlier this year. Engin Eroglu, chair of the European Parliament's China delegation, commented that the fragile trust between the two entities has exacerbated tensions. The ramifications of the ongoing Russia-Ukraine conflict further complicate matters, with the EU recently imposing sanctions on Chinese banks that supported Russia, leading to strained pre-summit negotiations.

The potential for collaboration hang in the balance, as China has recently increased export controls on critical minerals essential to European industries, further aggravating the relationship. These developments highlight a growing schism where the EU feels threatened by competitive trade practices from China, challenging the narrative of collaboration and cooperation that both sides have attempted to promote.