The first in-person EU-China Summit in four years took place in early December.
This came off the heels of Presidents Xi Jinping and Joe Biden’s meeting at San Francisco on the sidelines of APEC 2023. The summit saw both EU Commission President Ursula von der Leyen and Council President Charles Michel lead a sizeable delegation to exchange views on a number of topics – spanning trade, security, and climate change – with the Chinese leadership.
From the nadirs of the online conversation (dubbed by EU’s top diplomat as a “Dialogue of the Deaf”) that took place in April 2022 – two months after the war in Ukraine broke out, Sino-European relations have been slowly improving over the past two years. French President Emanuel Macron visited China in April 2023 and advocated that the European Union carved out its path of strategic autonomy – independent of both the U.S. and China.
He was joined by von der Leyen, who raised more pointed remarks on the need for European states to “de-risk” in their relations with China – selective, targeted decoupling and distancing in sensitive sectors where over-dependence upon China was deemed a significant liability to the interests of EU member states and businesses. September 2023 saw European and Chinese officials debate and discuss the possibility for greater market access and fair competition at the High-Level Dialogue, a further step in re-establishing a tenable working relationship through which differences could be abridged and managed – even if not resolved.
What could explain the gradual shift towards a more open, forthcoming relationship of engagement between Beijing and Brussels. China’s tardy, uneven trajectory of economic recovery in 2023, coupled with declining FDI numbers and investor confidence, has nudged its government into embracing an overtly and evidently pro-business rhetorical and policy stance in Q4 2023. The danger of de-risking slipping into de-coupling through retaliatory protectionism, thereby severely hindering Chinese access to European markets, is far too substantial for Chinese macroeconomics policymakers and manufacturers to ignore – especially in industries where Beijing is keen to establish a strategic global lead, such as Electric Vehicles and renewable energy.
Furthermore, Chinese leaders are acutely aware that Europe can and will continue to serve as a critical counterweight to hawks in Washington, who are keen on – and increasingly likely to, with Trump’s potential return – turning the world into a bifurcated, ‘Cold War 2.0’ dystopia. Given European preferences for a more multi-polar world – where European citizens can have their own say without kowtowing to either America and China – the EU makes for a natural partner in China’s push for a more dynamically balanced global order. That is, if China can take heed of European needs and preferences, and recognise their agency as independent actors.
On the other hand, European states are waging a serious war on their doorsteps on one hand – in relation to Ukraine, and compelled to take a side on another – the war in Gaza. Both wars, but especially the former, have placed severe strain on NATO’s defence spending and capabilities, as well as calling into question the tenability of the European project. The obstructionist Orban regime in Hungary not only reflects the pro-Russian streak within the Union, but also a significant minority of Euro-sceptic citizens across the region, who view Brussels as ossified, imperious, as captive in the hands of the Americans.
In the eyes of European diplomats, continually pacifying and strengthening relations with China is hence – at least hypothetically – conducive in keeping Beijing away from militarily supporting Russia (though the odds have always remained limited). Brussels is also eager to deepen the hitherto cursory dialogue over contentious issues such as Taiwan and Sino-European trade, with the latter being an item of particular concern to EU manufacturers that lack China’s comparative advantages of cheap labour and technological wherewithal.
It is against this backdrop that the recent visit by European delegates to China – and the ensuing conversations – served as a further, cautiously positive sign that both sides are eager to find ways to re-engage constructively. The recent summit provided a critical opportunity for both sides – especially the Europeans – to air their grievances and concerns, alongside enabling the Chinese government to undertake the initiative to rebuild the much-frayed trust and goodwill between senior leaders.
Whilst few substantive policy breakthroughs were accomplished, the optical and symbolic significance of the exchange of views and ideas cannot be overstated. Reports by the South China Morning Post suggest that a “relaxed and non-confrontational” Xi opted to affirm the right of Europe to be a “pole” on its own, as opposed to a “vassal” of anyone. This in turn was an effective sign of acknowledgment of a perspective long held by many of the EU’s most trenchant advocates and critics of Chinese characterisations of the EU – the EU possesses agency and autonomy, and it falls upon all other countries to engage with it on this basis.
The rhetorical olive branch was matched by a willingness of Chinese bureaucrats and negotiators across the board to listen to, respond to, and indicate openness to addressing the worries of European public sector actors over trade imbalances (which saw a doubling in European trade deficit in two years) and China’s stance on Russia’s war, with China’s economic prognosis and its openness to European investment issues of particular concern for private sector players. Whilst few concrete reforms were offered, Chinese officials’ frankness and attention to detail of such criticisms was viewed by a number of European observers as paving the way for future negotiations.
The question, of course, was whether in the absence of clear reciprocation by the EU delegation leaders to these shifts, the needle would eventually swing back. As it stands, this pessimistic outlook may be somewhat undue: Michel suggested in his post-meeting remarks that “China is fully aware of the serious consequences of any escalation in this region”, with a clear preference for peaceful resolution of the Taiwan question. Correspondingly, Brussels had provided reassurances that it would not back any push for independence – a key ‘red-line’ that China had demarcated as a prerequisite for all international partnerships.
The two parties found little in common over the purportedly competitive relations between the European and the Chinese manufacturing sectors – yet that is to be expected. Beijing has been upfront about its plans to become a manufacturing superpower, as it seeks to cultivate comprehensive resilience against external actors. This is effectively China’s version of “de-risking”: minimising risks incurred by exposure to and reliance upon non-friendly, potentially hostile actors with divergent geopolitical aspirations. Given the country’s shift towards advanced manufacturing and self-sufficiency, then, European automobile manufacturers would only face stiffer competition yet. Fundamentally, the economic asymmetry between China and the EU is structurally determined – till the day European manufacturers can produce electric vehicles at a cheaper price or a faster rate than their Chinese counterparts, the EU would always experience a trade deficit in relation to China.
Ultimately, real solutions to many of the above differences remain elusive in the short run. Western and Central European countries remain vehemently opposed to and repulsed by Russian aggression in Ukraine; China, conversely, views Russia as a core strategic and economic partner – though has publicly and substantively abided by international sanctions against military aid to Russia. Public anti-China sentiments, especially amongst the Scandinavian and Baltic States, remain visceral and enduring. For one, Italian Prime Minister Giorgia Meloni has recently withdrawn from the Belt and Road Initiative, in appeasing her voter base.
Such mistrust between Europe and China is amplified by the fact that select Chinese media and news sources often struggle with the unique linguistic and cultural contexts presented by Europe, and therefore come across as both staid and ineffectual in their attempts to portray China in a favourable light. The summit itself was a positive first step. Yet there are many reasons as to why Sino-European relations could well go South, in the months ahead. Whether it be sanctions and counter-sanctions over purported ‘violations’, or surging tensions in response to abrupt developments in Ukraine, there are significant headwinds in Sino-European relations that must be taken seriously. Reconciliation remains a work in progress.