The balance between China and Russia and the EU Firstpost

Chinese President Xi Jinping made his first visit to France in five years. He met French President Emmanuel Macron and EU President Ursula von der Leyen. The three held a trilateral meeting. This happened shortly after German Chancellor Scholz's visit to China.

Five years ago, Angela Merkel joined French and European leaders to meet XI and the four held a press conference together. Now things are different. China is stronger and more determined, but it is reaching out to Europe. Europe wants to maintain its relations with China, but wants China to better understand European concerns regarding Russia. There is a strategic divide that neither initiated.

The main demand of the Europeans at the summit with XI was that China reduce its support for Russia. Russian progress in Ukraine has made this even more important, and European leaders have stressed that China must curb the transition of dual-use equipment and technology to Russia because it impacts warfare. Such support has an impact on the EU's relations with China. On this issue, the EU, France and the United States agree and warn that China must avoid strengthening Russia with technologies, semiconductors, etc., which help replenish its defense production .

The second major problem was trade; Here, unlike the United States, which recently announced new sanctions against some Chinese institutions suspected of supporting Russia in its war in Ukraine, EU leaders did not opt ​​for sanctions but presented oral arguments . As von der Leyen said: “We are counting on China to use all its influence over Russia to end Russia's war of aggression against Ukraine.” Xi Jinping remains determined not to supply weapons to Russia, but has countered that China neither instigated nor was part of the war, and had no intention of participating in it.

He told his interlocutors that it was counterproductive to use the Ukraine crisis to pressure China and push the world toward a new Cold War. China wants France to maintain its independence and strategic autonomy and avoid, as in the past, a confrontation similar to that of the Cold War. He said it would be a good contribution, as the two countries celebrated the 60th anniversary of the establishment of diplomatic relations in 1964. Seeking a macro vision, he proposed supporting a multipolar world in which France would be a partner equal ; To achieve this, France should curb the trend towards decoupling, disruption of supply chains or protectionism.

For their part, EU leaders continued to emphasize that trade needed to be more balanced since the EU's unsustainable trade deficit with China had exceeded $400 billion. In 2023, trade between China and France amounted to $78.9 billion. This reflects consistent growth since 2019. France has become China's third largest trading partner in the EU, while China is France's largest trading partner in Asia. Cumulative bilateral investments exceeded $26 billion. Around 2,000 French companies are established in China.

The persistent lack of market access for European companies, Beijing's continued preference for its local state-owned enterprises, and unhealthy subsidies led to overproduction in their industries, which China then insisted on exporting to markets with which it had trade agreements, but which were not. designed for such dumping. Such market distortion could lead to a weakening of the industry in Europe. The EU was responsible for defending its industry and economies and, if necessary, would make tough decisions ahead.

European companies, while seeking partnerships with China, believe that Chinese electric vehicles and green energy products are heavily subsidized, making European companies uncompetitive. Chinese control of rare earth supply chains is disruptive for European producers of electric vehicle batteries. Since October 2023, an investigation and investigation has been launched by the EU against imports of electric vehicles from China, due to significantly lower prices, possibly based on state subsidies. In April 2024, the EU further launched an investigation into the purchase of medical devices on the Chinese market. These two investigations now annoy China, which took them over at that time.

Despite Xi's efforts to avoid decoupling, EU policy continues to de-risk its economic engagement with China, reduce excessive dependencies, and create a resilient alternative supply chain. If this is not done, the EU will not be able to leverage its access to the Chinese market, already facing disruption due to US sanctions.

Here, the EU is challenged by disruptions from within because the 27 EU members are not on the same page on how strictly to deal with China. There are nuanced differences between Germany, France and Brussels. Scholz did not invite the EU to join him on his visit to China. The fact that France did so shows that European countries are signaling to China that their capitals and Brussels would work in tandem.

While addressing these issues, Macron invited Xi to his childhood home in the Pyrenees and treated him to expensive cognac, which is interpreted as an indicator that China should lift its restrictions on imports of French cognac.

Twenty bilateral cooperation agreements have been signed. Among them was a call for international peace during the Paris Olympics later this year. Compared to Xi's visit five years ago, before the pandemic, despite all the changes in China, major European countries like France are working cohesively with the EU, which is now taking a stricter approach to towards China, but not as harsh as that of the United States.

In 2019, Xi had heard familiar complaints about the trade balance and lack of market access for European companies, but appeared to have done little to address them. What he said about the multipolar world, the partnership with the EU and the common maintenance of international order is also rehashed. However, the CA I that the EU proposed to China ran into problems in the European Parliament and, despite these recent meetings with Scholz, Macron and the EU, it is not put back on the table.

In 2019, the EU policy describing China as a partner or cooperation, an economic competitor and a systemic rival was maintained. The pandemic and the Ukrainian crisis have allowed EU countries to nuance their relations with China. China is taking advantage of the disruption of relations between Europe and Russia under American pressure. China's reluctance to accept Europe's economic arguments or adapt its market to its companies, as well as strategic inconsistency since 2019 have brought China closer to Russia, unlike Europe, leading to a situation in 2024 different from 2019. The EU has been damaged and Xi's visit to Europe can partly be seen as an exercise in damage control, especially given continued US pressure on it.

However, China has not committed to participating in the Ukraine peace conference in June and it is clear that it will not abandon Russia. For China, the end of the Ukrainian crisis must be negotiated, which must guarantee Russia's security interests, and therein lies a big story. And the European market must remain open. It is unclear what price China is willing to pay for this and for keeping the US-EU differential in play.

The writer is a former Indian Ambassador to Germany, Indonesia, Ethiopia, ASEAN and the African Union, Chairman of the CII Working Group on Trilateral Cooperation in Africa and a Professor at IIT Indore . The opinions expressed in the article above are personal and solely those of the author. They do not necessarily reflect the opinions of Firstpost.