Trade tactics cast pall over talks

China and Europe face a common threat from US tariffs, but European frustration is mounting over Beijing’s support for Russia’s war in Ukraine and what officials view as a flood of low-cost products.

Chinese President Xi Jinping, centre, gestures during the opening remarks of the European Union - China Summit at the Great Hall of the People in Beijing on Thursday. Picture: Martinez Casares/pool photo via AP

China and Europe face a common threat from President Donald Trump’s tariffs, but that isn’t enough to bring the two economies closer.

Instead, European frustration is mounting over Beijing’s support for Russia’s war in Ukraine and what officials view as a flood of low-cost products on global markets.

Those concerns loomed over a summit between European Union and Chinese leaders in Beijing on Thursday. The event was billed as a chance to mark 50 years of diplomatic relations between the two economies, but officials on both sides are striking a sombre tone amid growing pessimism about the relationship.

The summit has already been shrunk to a single day from two – at China’s behest.

Europeans say they want China to take concrete steps to address their concerns. China wants to enlist the EU’s help in pushing back against Trump’s trade policies, and Beijing views the bloc’s criticisms of its industrial and trade policies as misguided.

Chinese and European leaders must “make the correct strategic choices” amid a fast-changing and tumultuous global environment, Chinese leader Xi Jinping told visiting EU leaders in Beijing on Thursday, according to Chinese state media.

Welcoming EU Commission head Ursula von der Leyen and European Council chief Antonio Costa at Beijing’s ornate Great Hall of the People, Mr Xi said: “The more severe and complex the international situation is, the more important it is for China and the EU to strengthen communication, increase mutual trust and deepen co-operation”.

President of the European Council Antonio Costa speaks with Chinese President Xi Jinping (not pictured) during the opening remarks of the 25th European Union-China Summit in Beijing. To his right is European Commission President Ursula von der Leyen. Picture: Pool/AFP

Mr Xi added that Chinese and European leaders must “make correct strategic choices that meet the expectations of the people and stand the test of history”.

In response, Ms von der Leyen said “it is vital for China and Europe to acknowledge our respective concerns and come forward with real solutions”.

Mr Costa also stressed to the Chinese leader that the bloc wanted to see “concrete progress on issues related to trade and the economy, and we both want our relationship to be … mutually beneficial”.

Top of the agenda for the EU is the yawning trade deficit with China that stood at around $US360bn ($544bn) last year and which Ms von der Leyen has described as “unsustainable”.

Beijing has dismissed those concerns, insisting that Brussels must “rebalance its mentality”, not its economic ties with China.

Some European governments have been sceptical of Ms von der Leyen’s approach, but China’s rationing of Western access to critical raw materials jolted many of them, providing a rare moment of unity in the bloc about what they see as Beijing’s hardball tactics.

Germany, a central player in European foreign policy, pledged earlier this year to reduce risks in its economic relationship with China.

At a meeting of the Group of Seven industrialised economies last month, Ms von der Leyen went further, accusing China of creating a pattern of “dominance, dependency and blackmail”.

China said the comments were “riddled with bias and double standards”.

Beijing has sought to position itself as a force for stability and an antidote to Trump’s trade measures, offering olive branches that have included lifting sanctions against European politicians and easing visa requirements.

Chinese Foreign Minister Wang Yi recently dismissed concerns that China’s export controls on rare earth elements were fuelling discord with Europe, saying that as long as Chinese regulations are adhered to, “the normal demands of European companies will be guaranteed”.

European officials remain unconvinced and question whether Beijing would address their basic economic concerns. Some think China could expand activities that would hurt European companies.

“The China-EU relationship does face some challenges,” Chinese Foreign Ministry spokesman Guo Jiakun said at a briefing.

“Some in the EU,” he added, have “exaggerated specific economic and trade issues and groundlessly accused China on the Ukraine issue”, referring to accusations that China supports Russia in the war.

Brussels says China’s deepening political and economic relations with Russia since the 2022 invasion represent tacit support for Moscow that have helped its economy weather sweeping Western sanctions. Mr Costa urged China to “use its influence” on Russia to help end Moscow’s “war of aggression”.

“This is a core issue for Europe,” a senior EU official said.

“We know that Chinese companies supply around 80 per cent of the dual-use goods to the war,” they said. “We’re not naive. We’re not asking China to cut relations, but to step up the customs and financial controls.”

The Wall Street Journal