President Xi In Europe: European Union-China Catch 22 For US?

In 2021, the talk of “Strategic Autonomy” was buzzing in Europe’s corridors of power towards greater European independence primarily from dependence on  the US led by French President Emmanuel Macron.

Russia’s 2022 invasion of Ukraine reshaped Europe’s economic strategy to “De-Risking” to reduce economic dependence on China following Washington’s dictates’ to reduce economic dependence on China but the ground realities reflect a different picture than those of the US. For Europe to De-Risk economic ties with China will be much harder than for the US. Germany and France are for closer relations with China, as the recent visits of German Chancellor Olaf Scholz and French President Emmanuel Macron to Beijing illustrate. European Commission President Ursula von der Leyen has just outlined the European Union’s (EU) position on China in her landmark speech in Brussels; “It is neither viable – nor in Europe’s interest – to ‘De-Couple’ from China”. Instead, she wants to ‘De-Risk’ Europe’s economic ties with China. 

Can EU “De-Couple” from China? 

Diverging degrees of reliance on China help explain why views on China are so fragmented across Europe. Berlin and Paris are not averse to closer relations with China.The German auto and chemicals industries, in particular, are particularly exposed to China. This gives Beijing leverage to retaliate against EU de-risking plans by boycotting German firms. Europe’s dependence on China is especially high for goods required for the bloc’s ambitious energy transition: The EU imports more than four-fifths of its lithium-ion batteries from China, for example. Chinese inflow stands at $26 billion from 2020 to 2022 compared with near negligible to the US. “China is currently manufacturing, with massive subsidies. This is leading to an oversupply of Chinese subsidised goods, such as EVs and steel, that is leading to unfair trade,” EU has therefore more to lose from de-risking than the US. 

For Europe it will be a real struggle to implement its “De-Risk” policy in view of the above over interdependence and ultimately economic interest policies. This is not good news for the US. 

US in Catch 22 Situation

US remains rhetoric against China and wants Europe to ‘De-Couple’   Trade ties with China, but the EU can’t quite afford to do the same. Though, EU has dubbed China as a “strategic rival” on different occasions, it is pursuing a different approach from the US. “The EU is trying to carve out its own China strategy that is distinct from the US. This strategy is about ‘De-Risking’ the relationship, rather than ‘De-Coupling’.” De-coupling would mean to near end economic ties between the two nations. But, for the EU this is not in its interest.

“While the U.S. is trying to pull the EU into its direction to distance itself from China, the EU is keen to maintain economic ties with China. This desire is accentuated by the economic fallout from the Ukraine war which has affected European economies.US is proposing state subsidies to keep EU away from economic ties with China!

President Xi in Europe?

President Xi’s visit is on the occasion of the 60th anniversary of the establishment of diplomatic relations between China and France. Chinese President Xi Jinping’s visits to France, Hungary, and Serbia are to signal China’s increased influence in Europe, showcasing Beijing’s economic and geopolitical ambitions through extensive public diplomacy efforts. This visit comes on the heels of German Chancellor Olaf Scholz’s visit to China last month. Xi’s selected destinations in Europe carry a strong message to his tour in Europe. It is to identify avenues to weaken Europe-US coordination, with the hope that the EU could act as a counterweight to perceived American “Hostility” toward China. 

China is the clear winner of any US-EU discord, and we should expect the Chinese leadership to do everything it can to deepen the de-risking wedge between Europe and the US. Europe’s continued economic dependence on China is the greatest possible insurance against EU sanctions. President Xi said in his signed article that during his visit to France, he brought with him three messages from China: 

• China will work with France to carry forward the spirit that guided the establishment of their diplomatic ties, build on past achievements and open new vistas for China-France relations. 
• China will open even wider to the world and deepen cooperation with France and other countries.
• China will strengthen communication and coordination with France to uphold world peace and stability. 

Xi wrote “While opening up itself, China also encourages Chinese companies to go global.” 

Charles de Gaulle once said at a press conference after the establishment of diplomatic relations between China and France, “France simply recognizes the world as it is.” He firmly believed in the long history of Chinese civilization and emphasized that global development cannot be without China. 

France is an influential major power in the Western world, and its influence stems not only from its hard power but also from its longstanding tradition of independence and its unique perspective and vision. The stability of China-France relations provides more impetus for China-Europe relations and also helps European countries to understand China in a rational, pragmatic, and objective manner and handle their relations with China accordingly. After a two-day visit to France, Xi will travel to Serbia and Hungary, both of which are seen as friendly with Beijing.

On the war in Ukraine  Xi wrote that China “understands the repercussions of the Ukraine crisis on the people of Europe”. He emphasised that Beijing is not “a party to or a participant in it”, adding that “China has been playing a constructive role in striving for peaceful settlement of the crisis”. One of Macron’s key priorities will be to warn Xi of the danger of backing Russia in its invasion of Ukraine. The west wants China above all not to supply weapons to Russia. 

Xi’s visit is seen as a test of the EU’s efforts to walk a fine line between Beijing and Washington, with the Chinese leader widely expected to attempt to exploit divisions between Western allies. French President Macron has often warned against Europe becoming a US vassal. Europe is not unanimous on the subject because certain players still see China as essentially a market of opportunities. Xi’s travel through Europe highlights China’s bold play to exploit the divisions within Europe and across the Atlantic with the US. It also underlines Europe’s dilemmas in in playing the great power dynamic between the US, Russia, and China. The prospects of Russia’s growing military successes in Ukraine, and the mounting economic pressures from Beijing are squeezing Europe into a tight corner.

President Xi is in Europe on a serious mission to “Catch the Bull by its Horns” meaning Europe through its Eco Power as part of his drive to increase Beijing’s influence through Eco Colonialism. President Xi with this visit takes on the US Head-on when EU remains divided on a large number of issues.