Chinese President Xi Jinping (習近平) is on his first tour to Europe in five years, beginning with France on Monday this week, followed by Hungary and Serbia.
Notably, Xi’s infrequent trips overseas often come on the heels of changes unfavorable to China, be it Vietnam after its strategic partnership agreements with the US and Japan, or Russia, setting the course for an alternate global order. Similarly, this trip comes amidst the EU’s heightened scrutiny of trade relations with China, echoing US sentiments.
The tour has gained much attention as it is seen as Xi’s effort to create diplomatic space for China within the Western alliance and protect its manufacturing sector, using France as a shield against the EU’s various efforts to “derisk” from China.
The meeting unfolded against a backdrop of strained relations, from investigations into foreign subsidies on Chinese medical devices to espionage accusations leading to arrests in Germany.
Xi’s first stop in Paris confronted China and France with uncomfortable and sensitive issues such as the Russian war in Ukraine and Chinese trade practices and overcapacity. The presence of EU President Ursula von der Leyen in the morning meeting indicated the EU’s growing concerns about China, signaling unity with France, and sidelining individual deals and concessions.
In their meeting, Macron emphasized that France and the EU are not the US, distancing them from the China-US rivalry to gain confidence in achieving two important objectives – commitments from China on curtailing any material help to Russia in its war in Ukraine, and address China’s overcapacity in its manufacturing sector, especially electronic vehicles (EV), and achieve consensus on trade and global economic security.
Xi’s reply to a question of Chinese support for Russian war efforts was cold as he said parties must seek the right path to resolve the Ukraine “crisis." He added that China is not a party to the crisis, which should not be used to sully its image. He also denied the existence of overcapacity. The choice of words in Xi’s opening remarks was interesting as he used the word “strategic” four times from cooperation to trust and consensus. This was consistent with Xi’s efforts to impress upon a new tangent in France’s strategic outlook. However, Von der Leyen’s stern comment that the “EU can not ignore overcapacity and China’s market distortions” shadowed these attempts. The talks showed that China is unwilling to make concessions, ignoring the EU’s most pressing geopolitical and economic challenges.
The subsequent closed-door discussions between Macron and Xi culminated in a call for an "Olympics Truce" during the Paris Olympics, highlighting diplomatic efforts amid tensions. In a press conference after the meeting, Von der Leyen’s statement that the EU “will not waver from making tough decisions” to protect its economy and security, echoed the US Secretary of State Antony Blinken’s warning that if China does not address the Russian problem, the US will.
Xi’s trip, seen as diplomatic leveraging in China’s favor, met with an awkward start. Diplomacy is bargaining, in which each party withholds what the other wants to get the most favorable result. But here is the caveat – if China fails to bargain on these issues, it will inadvertently force the EU to align closer with the US. Despite Macron saying “we are not the US,” he has maintained that the US is an ally of the EU, which supersedes any partnership. Therefore, if China cannot leverage its relationship with Russia (since it is the only one with that power) to dispel the EU concerns, the longer the war lasts, the greater the chances that China will lose the EU’s confidence and even its market. Amid the trade war with the US, the loss of the EU market will spell huge trouble for China’s manufacturing sector while the nation is undergoing acute economic crisis and youth unemployment. Notably, last year China was the largest partner for EU imports of goods, which made up 20.5 percent of China’s total imports, while the bilateral trade was worth US$783 billion.
While the EU has been trying to “de-risk” from China, member nations have been courting Taiwan to build supply chain resilience after the COVID-19 pandemic. Last year, Taiwan chose France to host its first overseas car battery plant worth US$6 billion, in Dunkirk by Prologium, which was larger than the 18 agreements signed between France and China. In the same year, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) also approved US$3.8 billion to set up a chip factory in Dresden, Germany.
Xi’s next stops, Hungary and Serbia both have pro-Russia leaders, and therefore harbor heavy anti-US sentiment. It is safe to assume that these stops were chosen strategically to create a pro-China narrative within the EU. While the talks in Paris were confrontational and put Xi on the defensive, visiting the next two countries will be a smoother ride.
Swati Arun is a Ministry of Foreign Affairs visiting scholar at National Taiwan University and National Chengchi University.
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