Xi Jinping lands on Sunday evening in a Europe that views China more critically than the last time in 2019. During his visit to the Elysée, his host Emmanuel Macron serves French cognac, which is the subject of a competition investigation in China in reprisal for several European complaints about unfair Chinese competition. And more thorny issues are being discussed, of which the war in Ukraine is the most important for the French president.
During Xi’s previous trip, Europe was also concerned about China’s growing economic and geopolitical power. Should China’s Huawei participate in European 5G networks? Wasn’t China given too big a role in European essential infrastructure, such as railways and ports? Was mutual trade sufficiently balanced? In a report published that same month, the European Commission called China not only a “cooperation partner”, but also a “competitor” and a “system rival” that threatens the existing international legal order.
But that did not stop economically struggling Italy from joining the New Silk Road (BRI) during Xi’s visit to Rome. Belt and Road Initiative), a major Chinese investment program in foreign infrastructure. Chinese companies would, among other things, have a role in the further development of the ports of Trieste and Genoa, and Italian companies expected broader access to the Chinese market.
The agreement caused irritation in many other European capitals, as well as in Washington. For Xi, it was an important symbolic victory: Italy was not only the end point of the ancient Silk Road that the BRI emulates, but this first agreement with a G7 country “driven a wedge into the economic alliance that once ruled the world” – “a serious blow to the Trump administration,” as the English-language party newspaper said ChinaDaily satisfied.
During this visit, Xi will also want to make it clear that Europe can do good business with China, and that it is therefore wise not to be drawn into the American rivalry with Beijing. A visit to Macron, who warned before his own trip to China last year that Europe “should not get entangled in other people’s conflicts”, seems a good opportunity for that message. The hope is that France will urge the EU to continue taking a “positive and pragmatic” course towards China, Foreign Minister Wang Yi told Chinese state media last weekend.
Tourmalet
The visit looks like a meeting between friends. The Macron couple will take Xi and his wife Peng Liyuan on Tuesday to the Col du Tourmalet in the Pyrenees, where the president’s grandmother lived and little Emmanuel spent a lot of time. It mirrors Macron’s trip to China in April last year, when Xi had tea with his guest at the house in Guangzhou where his father Xi Zhongxun was a director from 1978 to 1981.
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But Sino-European relations are different than five years ago. Last December, the Italian government announced that it was terminating the BRI agreement, which was to be tacitly extended at the beginning of this year. The New Silk Road had not delivered enough economically, the Italian trade deficit with China only increased, while the deal and the relationship with Washington were damaged. European countries are now adhering to strict US export restrictions on advanced technology, such as chip machines from the Dutch ASML.
Moreover, Europe is now much more aware of the importance of ‘strategic autonomy’. At the beginning of the corona crisis, it had to obtain face masks and medicines from China and after the outbreak of the Ukraine war, it turned out to be too dependent on Russian gas. Europe has been striving ever since ‘de-risking’although it has difficulty convincing China that this is anything other than ordinary protectionism.
Several European leaders and US Treasury Secretary Yellen complained about the overcapacity of China’s green industry during recent visits to Beijing. In recent months, the EU has launched several investigations into market-distorting Chinese state aid for, among other things, the electric car industry, wind turbines, solar panels and medical equipment, which could potentially lead to additional import duties. In recent years, Xi’s host Macron has strongly urged European action against unfair Chinese competition, and plans to raise this again next week.
Chinese hope for a ‘positive and pragmatic’ course from Europe
Branches of the Chinese Nuctech in Rotterdam and Warsaw were even raided last week to investigate whether the company receives unauthorized subsidies. Nuctech makes scanning equipment for airports and ports, including those in Rotterdam. According to Washington, the company poses a security risk because of its Chinese ties: it is on a US sanctions list. And, speaking of security, last month people were arrested in several European countries on suspicion of spying for China, including a close associate of the European party leader of the far-right German party AfD.
Xi could make his point by promising more Chinese investment in France’s electric battery industry, one of Macron’s wishes during the visit, according to Bloomberg’s sources. Last year, the French president announced the arrival of a large battery factory in Dunkirk, a joint venture between a Chinese and a French company.
NATO bombing
But even more important for Macron is the Russian invasion of Ukraine. The French president will again insist that China use its good relations with Russia to end the war. China is officially neutral in that conflict, but in reality evidence is mounting that Chinese banks and companies keep the Russian war machine going by importing Russian oil and gas, helping Moscow evade Western sanctions, and ‘dual use’technology for the defense industry. This is happening on such a large scale that Russia has even been able to significantly increase its weapons production despite Western sanctions. The Americans therefore put a large number of Chinese companies on the sanctions list again on Wednesday, and the EU already did this in February.
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Macron may try to persuade Xi to send a Chinese delegation to a peace conference on Ukraine in Switzerland in mid-June. After meeting Xi in Beijing last month, German Chancellor Olaf Scholz said Xi “supports” that conference, but China’s participation has not yet been confirmed. On the other hand, it is expected that Xi will receive Vladimir Putin again this month, with whom he confirmed his “unlimited friendship” just days before the Russian invasion in February 2022. Chinese Foreign Minister Wang Yi even blames the war on the Western ‘Cold War mentality’ of the expanding NATO.
The rest of Xi’s European program raises concerns that little progress can be expected in this area. On Tuesday, the Chinese leader will travel to Belgrade, where he will meet with Serbian President Aleksandar Vucic, who continues to have warm relations with Putin. The day of Xi’s visit marks exactly 25 years since NATO accidentally bombed the Chinese embassy in the Serbian capital during the Kosovo war, an incident that still stirs up a lot of anti-Western feelings in China.
Xi will then conclude his Europe trip in Hungary, which, like Serbia, is enthusiastically participating in the BRI and where China is investing heavily. Within the EU under the government of Viktor Orbán, Hungary often acts as a disruptor when Brussels tries to implement sanctions against Russia or support packages for Ukraine. Foreign Minister Wang last month praised Hungary for “its commitment to being a force for peace and stability in Europe in the complex international situation.”
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