China must work on trade and trust with EU if it wants warm long-term ties

Beijing views relations as challenging but satisfactory, while Brussels is deeply unhappy about the trade imbalance and distrustful of China’s ties with Russia
There are shared interests but how China handles its trade with Europe and its diplomacy around the Ukraine and Middle East conflicts will be the ultimate testing grounds

Matteo Garavoglia

Published: 4:40pm, 15 Dec 2023

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When top European Union officials landed in China last week for the EU-China summit with President Xi Jinping, they had a long list of concerns.

The visit by the power trio of European Commission president Ursula von der Leyen, European Council president Charles Michel and EU foreign policy high representative Josep Borrell – which came after visits by the commission’s vice-presidents Valdis Dombrovskis and Vera Jourova – is part of a build-up that saw increasingly high-level visits taking place in both Brussels and Beijing.

At the EU-China summit, significant trade imbalances were at the top of the EU agenda. Especially driven by concerns of member states such as Spain and Italy, Michel and von der Leyen asked Xi for meaningful action to address what they see as major obstacles to Europe’s market access to China.

In this context, Italy’s recent decision to leave the Belt and Road Initiative is noteworthy. Italy was the largest economy in the world to have signed up to the Chinese plan. Unfortunately, its departure is part of an emerging trend of European countries scaling back their cooperation with China.

Estonia, Latvia and Lithuania have left a cooperation framework established between China and several central and eastern European countries, with the Czech Republic increasingly critical of the format.

Meanwhile, Brussels has made clear it will press ahead with its “de-risking rather than decoupling” strategy. A loosening of the economic relationship between the EU and China is bad news for both parties and should be avoided. The question is if and how the existing trade imbalances can be corrected.

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EU foreign policy chief urges Beijing ‘to find common ground’ to tackle trade imbalance with Europe

Beyond trade and economics, the focus was on Ukraine and the Middle East. On the former, Brussels asked Beijing to use its leverage with Moscow to bring an end to the conflict. While no significant breakthrough is expected, the EU sees China’s non-provision of lethal weapons to Russia and the non-circumvention of sanctions on Russia as crucial to building mutual trust.

Brussels has made clear that, if necessary, it is prepared to impose sanctions on Chinese companies and asked President Xi to take steps to address Europe’s concerns. On the Israeli-Palestinian conflict, both sides are advocates of a two-state solution.

In private conversations, European officials welcome, and actually encourage, a more active role for China in global diplomacy. The hope in Brussels is that the conflict in the Middle East and Russia’s invasion of Ukraine might provide opportunities to nurture diplomatic synergies.

Ultimately, these are the testing grounds where the viability of a mutually beneficial long-term relationship between Europe and China will be assessed.

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China-EU summit: Xi Jinping calls on EU leaders to work together and strengthen mutual trust

Within a challenging context, not everything is doom and gloom. Beyond economics and security, there are a number of policy areas where slow but tangible progress is taking place. Brussels and Beijing are, for instance, playing a major role in the drafting of an international treaty on pandemic preparedness and management as advocated by the global public health community.

And good news might in time emerge when it comes to the provision of a variety of global common goods. Biodiversity, governance of the oceans, plastic pollution, deforestation and food security are all areas where China and Europe are finding common ground. The setting up of ad hoc working groups on wine and spirits, cosmetics, export controls and financial regulation is aimed at defusing possible tensions before they spiral out of control.

On climate change, Brussels is eager for Beijing to play an even more ambitious role by joining the EU’s efforts on the Global Methane Pledge, tripling its renewable energy capacity and doubling the rate of energy efficient improvements by 2030.

How China and EU can transcend zero-sum mindsets and create a better world

This latest EU-China summit was underpinned by a fundamental disconnect in terms of perceptions. On the one hand, Beijing views the relationship with Europe as characterised by significant challenges but, overall, satisfactory. On the other hand, Brussels is deeply unhappy with the nature of its relationship with China.

To be sustainable in the long term, any relationship must ensure that all parties are satisfied with it. This is manifestly not the case at present and change is coming. Hopefully, this will be by common agreement.

Matteo Garavoglia is professor of practice at the Department of International Relations at Tsinghua University in Beijing. He is also research associate at the University of Oxford’s Department of Politics and International Relations