Politics & News

Xi Jinping’s Europe Tour: Trade Tensions, EU Divisions and Strategic Opportunity

Chinese President Xi Jinping will embark on a trip to Europe on Sunday, for the first time in 5 years.

His tour will include three European countries, France, Hungary, and Serbia, in a bid to ease escalating tensions that could evolve into a trade war between Beijing and the European Union (EU) and deepen ties with countries that seem ready to embrace China’s view of a new global order.

Critical Timing

The visit comes in a time when Xi is trying to avert a trade war with the EU, amid growing concerns over China’s global ambitions, its ongoing support for Russia in its war on Ukraine, and Chinese growing espionage activities in Europe.

Xi Jinping's Europe Tour: Trade Tensions, EU Divisions and Strategic Opportunity
Chinese President Xi Jinping

This trip offers an opportunity to court China’s critics and show that some European countries still welcome Beijing despite the hardening views in other EU countries.

China seeks to moderate Europe’s push on alleged trade distortions, which could have bad consequences for its declining economy. It also wants to make sure that Europe doesn’t get closer to the US.

Growing Divisions

However, this trip could highlight divisions, not only between Europe and China, but also within Europe, which could in turn align with Beijing’s interests.

Noah Barkin, a Berlin-based visiting senior fellow at the German Marshall Fund of the United States, told CNN that “China is seen increasingly as a multi-faceted threat in many European capitals. But there are divisions within Europe over how fast and far to go in addressing concerns about China, both in the economic and security spheres.”

What’s on the Agenda?

Lin Jian, a spokesman for China’s foreign ministry, said Xi’s visit would “inject stability into the development of China-Europe relations and make new contributions to peace and stability in the world,” reported Reuters.

According to Mathieu Duchatel, senior fellow at the Institut Montaigne, Xi’s goal would be “neutralizing the EU’s economic security agenda, including its tariff threats, by exploiting internal differences.”

He described China’s approach towards Europe as a “divide and rule” strategy.

The Chinese leader has carefully chosen these three countries as they seem increasingly suspicious of the US America’s postwar world order, see China as a necessary counterweight and are eager to bolster economic ties, according to the New York Times.

Easing Trade Friction

The first stop in Xi’s visit is France, where he will meet the French President Emmanuel Macron and the president of the European Commission, Ursula von der Leyen.

Von der Leyen has advocated “de-risking” EU supply chains from China, amid concerns over the security of its key technologies.

The European Commission has launched a probe, backed by France, to investigate whether Chinese electric vehicles (EVs) that flood the EU markets benefited from unfair subsidies, with a decision expected in June.

According to the NYT, this has caused tensions with China and with Germany, which has a heavy presence in the Chinese auto market. German automakers, with plants in China, fear that any imposition of European tariffs could affect their own exports from China, and lead to retaliation from Beijing.

In what is seen as a retaliatory move, China opened an investigation earlier this year into the price of EU-imported brandy, which could affect France’s cognac sector, according to CNN.

Courting Macron

In France, Xi is likely to stress Beijing’s message that “de-risking” from China could negatively impact Europe, while trying to mitigate European concerns over China’s alleged overcapacity and subsidies and emphasizing the possible role of Chinese EVs in reducing the use of fossil fuels.

Xi Jinping's Europe Tour: Trade Tensions, EU Divisions and Strategic Opportunity
Macron with Xi Jinping last year in China

Macron has repeatedly said that the survival of the EU depends on “strategic autonomy” and developing the military resilience to become a “Europe power.” He also said that Europe “must never be a vassal of the United States” and advocated a “multipolar” world free of “blocs and the cold war mentality.”

The Chinese leader could find an opportunity to gain the approval of Macron during their one-on-one time, as the visit is expected to include more “personal” time in the Pyrenees Mountains of southern France, CNN cited Elysee sources.

Chong Ja Ian, an associate professor of political science at the National University of Singapore, said that France has portrayed itself as “being a fairly independent actor in the EU and willing to create some space with the US.”

So, Xi may want to “work on Macron to see if he can get more European distance from North America, as well as tightening his rapport with this important EU player,” he added.

Ukraine War

The war in Ukraine is expected to be on Xi’s agenda, where he may attempt to underscore China’s position as a peacemaker.

Wang Yiwei, a professor of international relations at Beijing’s Renmin University, said: “President Xi will explain to President Macron about China’s relations with Russia … (that) China can be a broker to bridge the gaps between Europe and Russia.”

However, Xi’s visit comes amid growing concerns in the US and its European allies that China’s dual-use exports to Russia are supporting its war efforts.

Barkin, from the German Marshall Fund of the United States, suggested that Macron and Von der Leyen would likely warn Xi their relationship “risks deteriorating further” if China continues to provide those goods.

He expected that Beijing’s behavior would not change, and noted that “at some point soon” Europe could decide to take more aggressive actions in sanctioning Chinese firms selling such goods.

Warm Reception

The next stop for Xi will be Serbia and Hungary, where he is expected to receive a warmer welcome. In this regard, Barkin said: “In Belgrade and Budapest, Xi will not have to listen to the criticism he hears in other European capitals.”

He explained that the leaders of both countries “welcome Chinese investment, and they don’t have a problem with China’s deepening ties to Russia.”

The Chinese President’s visit to Belgrade will coincide with the 25th anniversary of NATO’s bombing of the Chinese embassy in Belgrade during the Kosovo war, killing three Chinese journalists.

Xi Jinping's Europe Tour: Trade Tensions, EU Divisions and Strategic Opportunity
A memorial at the site of what was once the Chinese Embassy in Belgrade, Serbia

This incident caused a huge increase in anti-US sentiment in China, although Washington apologized and said it was an accident. It also drove Beijing’s deep hostility toward NATO. And if Xi commemorated this event, it would highlight the deep divisions between China and the alliance.

In Hungary, Xi will try to strengthen his relationship with Prime Minister Viktor Orban, one of his closest allies in Europe who has blocked or criticized EU’s efforts to hold China accountable on human rights issues.

Deepening Ties

In both Belgrade and Budapest, Xi will likely underscore Chinese investments, in a message to the rest of Europe.

Serbia, under President Aleksandar Vučić, has seen a growth in trade and investment ties with China. In January, the non-EU member state announced a deal with China with over $2bn investments in wind and solar power plants and a hydrogen production facility.

Meanwhile, Hungary has emerged as an increasingly significant production hub in Europe for Chinese automotive suppliers and EV makers.

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