Joerg Wuttke, president of the European Union Chamber of Commerce in China, said US-China relations could continue to decline and the EU would need to react to it.

“Europe should first and foremost find its own interests,” Wuttke said. “We should not slavishly follow one or the other. We have far more in common with the US than with China … but we don’t choose a side.”

EU officials have said repeatedly that the bloc does not take a position on US-China tensions, but observers said China may become a target in political and security discussions by an expanded G7.

Britain has reportedly proposed that the G7 should add India, Australia and South Korea and form a 5G club of 10 democracies, dubbed D10, to find alternatives to Chinese telecoms maker Huawei, as well as addressing other concerns on China.

“China and the EU should take time to fix mutual trust which was hurt by the pandemic,” said Cui Hongjian, director of the department for European studies at the China Institute of International Studies.

“China should firstly keep the foundation of economic cooperation with the EU – we don’t want the problems with the US to recur with the EU. The EU underscores trust and reciprocity in our relations, and so do we.”

EU ‘gravely concerned’ over Hong Kong, but rules out further action

China has faced a growing international backlash over its initial handling of the Covid-19 pandemic and combative diplomatic stances. The recent decision to impose national security legislation on Hong Kong has surfaced as a new focus of criticism.

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China vows reforms at annual EU summit amid increased trade tensions

China vows reforms at annual EU summit amid increased trade tensions

The EU has asked Beijing to remove barriers to European companies operating in China and complained that its state-owned enterprises enjoy an unfair competitive advantage.

In a telephone conversation with German Chancellor Angela Merkel on Wednesday, Chinese President Xi Jinping said China was committed to continuing to open up its market for foreign investors, and hoped Germany could promote China-EU ties.

But Wuttke said “a sense of international retraction” in China may undermine attempts at cooperation.

“The relations with the US are hardened, and I don’t see any effort yet to improve relations with Europe,” he said. “I don’t see any change in opening up to European products, or working together on reforming the World Trade Organisation, for example.”

The EU views China as a negotiating partner, economic competitor and systemic rival in governance, according to an EU strategic outlook report last year that marked a toughening of policy towards Beijing.

EU’s top diplomat calls for ‘more robust’ stance on China

Shi Yinhong, a Chinese government adviser and professor on international relations with Renmin University in Beijing, said the economic downturn and implementing the interim trade deal signed with Washington in January had occupied Beijing, limiting its capacity to win over Europe.

The continent’s criticism has most recently concerned fears that Hong Kong’s partial autonomy, guaranteed by international treaty, has been undermined by Beijing’s decision to introduce a national security law in the city.

“China will not back off on the Hong Kong issue,” Shi said. “Against the backdrop of the US’ extreme containing measures against China, so far China has not done enough to win over countries that have been closer to the US.”

EU foreign policy chief Josep Borrell on Tuesday told German media that US-China tensions represented a new normal and the EU had to “find an answer”, with Beijing being “an indispensable partner” despite its many differences with the EU.

“China needs Europe as a market for its products, as an investor and supplier of hi-tech and also for international recognition,” he said in an interview with Sueddeutsche Zeitung. “These are our means of pressure, we have to use them better.”