By Orçun Göktürk/ Beijing, China
Chinese President Xi Jinping visited Europe for the first time in 5 years. Xi’s visit to France, Serbia and Hungary from May 5 to 10 occurred in the shadow of the Ukraine war. Coming on the heels of German Chancellor Olaf Scholz’s visit to China last month, the visit is seen as a defining moment for China-EU relations.
Europe broke on its commitments…
China-Europe relations are critical in a multipolarized international order. During his last visit to Europe in 2019, before the COVID-19 pandemic, Xi signed high-level agreements with Italy and the EU. China and the EU agreed in principle on a bilateral investment treaty in 2020.
But this “Comprehensive Investment Agreement”, as it is officially known, never actually came into force. The European Parliament first approved it, but six months later, following the US lead, canceled it, citing alleged “human rights violations in Xinjiang”.
During Xi’s visit to Italy, also in 2019, it was decided that the country would join the Belt and Road Initiative (BRI). This was the first time a G7 country joined the BRI, which shocked the Western world. As a matter of fact, again under pressure from the US, Italy announced leaving the BRI in 2023.
Trade relations still progressed
Despite these political tensions, China-EU relations have advanced economically. China-EU trade relations have increased by 900 percent since 2001, when China was invited to join the World Trade Organization, reaching the $1 trillion mark last year. Chinese foreign direct investment in the EU is mainly concentrated in three countries: France, Germany and Hungary. It is noteworthy that Xi visited two of these three.
Of course, we cannot separate trade relations from the political basis. Despite all the accusations, China is a very pragmatic country and does not want to compromise on trade volumes. The biggest factor negatively affecting EU-China relations is the US stance and its pressure on Europe.
At a time when the US is stepping up its accusations against China such as “overproduction”, “unfair competition from state-sponsored companies”, “technological aid to Russia”, etc., EU leaders use a similar rhetoric. In this sense, we can say that Ursula von der Leyen acted as the US spokesperson during Xi’s visit to France.
Macron and Leyen’s different positions
Xi’s first stop was France. For days, the Chinese media reminded the Chinese public of Macron’s kind words during his last visit to China. In an interview with Politico’s reporter on the plane after his 3-day visit to China in April last year, the French leader’s statements that “we would remain neutral in a possible conflict”, especially on the Taiwan issue, and his statement that “Europe should not be a vassal of the US” drew great reaction from the US and Westerners. In this sense, when Xi arrived in France, the Chinese media was full of comments that Macron was the good cop, and the European Commission President von der Leyen was the bad cop. Leyen’s participation in the meeting made it clear that the trilateral summit had a European agenda. The two European leaders presented their trade criticism and proposals for China.
In September, the European Commission for the first time launched an anti-subsidy investigation into Chinese electric cars. A second investigation into China’s photovoltaic industry has just begun, while an inquiry into the country’s supply of medical devices has also been launched under a parallel commission program. Similar criticism was leveled at China during Scholz’s visit to Beijing. Xi denied the allegations and only lifted restrictions on beef and apple imports.
Several commercial contracts were signed during the 6th French-Chinese Business Council organized on the sidelines of Xi’s visit. A partnership was established between Xiamen Tungsten New Energy, a lithium cathode materials company, and Orano, a French company specializing in nuclear fuels.
Critical issue on the agenda: Ukraine
French leader Emmanuel Macron had said before the visit that he would do “everything possible” to ensure a ceasefire during this summer’s Olympic Games in Paris, and that he would seek Xi’s help to make this a reality. During the meeting, Macron and von der Leyen also sought to pressure China to use its influence over Moscow to end Russia’s military intervention.
Switzerland will host a high-level peace conference on the Russia-Ukraine war in mid-June. Macron had hoped to persuade Beijing to attend the meeting in the hope of making real progress, but top Chinese diplomats announced that they would not green light an invitation without Russia.
Chinese President Xi Jinping has strongly objected to his country being criticized for its close ties with Russia, saying he opposes “using this crisis to shift responsibility to third countries, tarnish their reputations and start a new Cold War”. Xi also reiterated that China is not at the root of the Ukraine crisis and is not a party to it. The President sought to maintain China’s stance of “neutrality”. Xi said China would support the organization of an international peace conference that would be recognized by both Russia and Ukraine.
In Belgrade on the anniversary of the NATO attack
After France, Xi’s next stop were Serbia and Hungary. These are the two countries with which China has the closest relations in Europe.
Xi visited Serbia again after eight years. In 1999, during the NATO bombing of the then Federal Republic of Yugoslavia, the Chinese Embassy in Belgrade was also hit by NATO airstrikes. On May 7, the 25th anniversary of this attack, Xi’s visit to Belgrade is a symbolic response to the US and NATO. 25 years ago, three Chinese journalists were killed, 20 people were injured and the embassy was heavily damaged when US NATO planes attacked it.
Ahead of the visit, Xi wrote in an article for the Serbian daily Politika: “We must never forget this brutal attack. The Chinese people value peace, but we will never allow such a tragic history to repeat itself.”
Xi first visited Serbia in 2016 and signed a number of bilateral agreements, including the Declaration on Strategic Partnership. The agreement reflects China’s aim to increase its presence in the Balkans and Europe more broadly. China is currently the largest foreign investor in Serbia.
After the meeting with Serbian leader Vucic, 28 cooperation agreements were signed between China and Serbia. In addition, relations between the two countries were upgraded from “comprehensive strategic partnership” to “shared future”. This is part of Xi’s core foreign policy concept: “Build a Community with a Shared Future for Mankind”.
‘Friendship in steel’
The joint statement expressed support for the rapid opening of the RMB swap bank in Serbia. The statement said that both sides are ready to promote the use of local currency in bilateral trade and investment, and encourage financial institutions to provide financing support and financial services for trade and investment cooperation.
Speaking at a joint press conference after the signing ceremony, Serbian President Aleksandar Vucic said that no one can break the “steel” friendship between China and Serbia. Vucic said that Serbia is facing great pressure in the international arena and will have China’s firm support in issues at the United Nations, adding that, on the other hand, Taiwan, Xinjiang and Hong Kong are China’s internal affairs and with Belgrade supporting the “One China” principle in this context.
Chinese President Xi said that China and Serbia have started a new era in the history of their relations. He added that “Serbia is the first European country with which we are building a common future”. Emphasizing that the talks and agreements signed demonstrate the strength of cooperation between the two countries, Xi said, “Serbia and China continue to strongly support each other in the international arena. China supports the preservation of Serbia’s territorial integrity and sovereignty.”
Last stop Hungary
Xi’s last stop on his European tour was Budapest. In a written speech upon his arrival in Budapest, Xi said that China and Hungary are two good friends and good partners based on mutual trust.
“I am pleased to pay an official visit to the beautiful country of Hungary at the kind invitation of Hungarian President Tamas Sulyok and Hungarian Prime Minister Viktor Orban,” Xi said.
“Together, we have demonstrated a good example of building a new type of international relations based on mutual respect, justice, win-win cooperation,” Xi said, adding, “No matter how the international landscape changes, China and Hungary will approach bilateral relations from a broad and long-term perspective.”
This year marks the 75th anniversary of the establishment of diplomatic relations between China and Hungary. In 2017, bilateral relations were upgraded to the level of comprehensive strategic partnership.
Hungary is the first EU country to join the Belt and Road Initiative announced by Xi in 2013. The country is also a focal point for Chinese investment. BYD, which became the world’s largest electric vehicle manufacturer by overthrowing Tesla in the electric vehicle market, announced that they would open their first production center in Europe in Hungary.
Direction of Sino-European relations
While Southern European countries such as Serbia and Hungary are an important fulcrum in Sino-European relations, relations with the continent’s battering rams such as France and Germany are under US pressure. The EU is currently scrutinizing Chinese investments on the continent, and “overcapacity” has become the watchword of the day, with the European Commission launching a series of trade investigations that could ultimately result in penalties for Chinese clean technology exports.
As for the “trade deficit”, one of the biggest points of contention in China-EU relations, there is a downward trend in favor of the EU. According to 2023 data from Eurostat, the EU’s official statistics office, the trade deficit in EU trade with China decreased by 27 percent compared to the previous year. In 2023, China remained the EU’s largest importer of goods and the third largest exporter of goods.
A few months ago, the US Intelligence Community’s “2024 Threat Report” was released. The US ranks China first in terms of threats to itself. The US may have good reasons for this interpretation, because China is a rising power while the US is declining. But can we reach the same conclusion for Europe? In other words, is China the biggest threat to Europe? That is the debate for Europe.
In his book ‘World Order’, Henry Kissinger outlined three possibilities for the future of the EU. First, the EU’s role in maintaining the so-called “rules-based international order” in closer ties with the US; second, the EU’s move towards a closer alignment with Russia and Eurasian powers; and third, the emergence of the EU as a stand-alone pole. Kissinger argued that the first of these was essential for the US, while the other two would have disastrous consequences for the US.
Traditional US foreign policy makers cannot even bear the prospect of the EU becoming a “stand-alone pole” without Russia and China behind it. A Trump victory in the US presidential elections could also lead to a serious rupture in Europe’s traditional role in international affairs. And this is where the real crossroads for Europe lies.