Xi’s trip to Europe could reveal divisions in the EU over strategy for dealing with China

Chinese President Xi Jinping heads to Europe for the first time in five years next week, in a visit that could reveal European divisions over trade with Beijing and how the continent positions itself as a hub between the United States and China. China.

Xi travels to France, Serbia and Hungary at a time when the European Union is threatening to impose tariffs on China’s electric vehicle and green energy sectors due to huge subsidies that the bloc says give Chinese manufacturers an unfair advantage.

With China’s economy facing headwinds and the US closing itself off to Chinese companies, the EU may have some leverage over Beijing. But the bloc’s 27 members are not well aligned, hampering their ability to shape Chinese thinking, analysts say.

The visit is overshadowed by European concerns about Chinese support for Russia’s war economy, two years after the start of its military campaign in Ukraine.

Lin Jian, spokesperson for China’s Foreign Ministry, said Xi’s visit “will inject stability into the development of China-Europe relations and make new contributions to peace and stability in the world.”

Xi’s aim will be to neutralize the EU’s economic security agenda, including its tariff threats, by exploiting internal differences, said Mathieu Duchatel, a senior fellow at the Institut Montaigne.

“There is a very strong element of divide and rule,” Duchatel said of China’s strategy toward Europe. “This is not hidden, but in plain sight.”

European companies and governments have long complained about restricted access to the Chinese market and unfair competition. A Kiel Institute study estimated that China’s subsidies to its companies range from three to nine times more than other major economies.

The European Commission has the exclusive right to manage trade policy for the entire EU, but within the bloc members have struggled to reach agreement on how to correct the trade imbalance.

French President Emmanuel Macron is seeking a more aggressive stance from the EU on subsidies and warned the bloc risks being left behind if it does not allow exemptions to its own competition rules in the face of China’s “excessive subsidies”. and the USA.

“We regulate too much, we don’t invest enough, we don’t protect enough,” Macron told The Economist in an interview published on Thursday.

In April, German Chancellor Olaf Scholz pressed Xi for better market access for German companies. But on EU anti-subsidy investigations, apparently seeking to avoid antagonizing Beijing, he said the bloc should not act out of protectionist self-interest, although competition must be fair.

Some French government officials say privately they are worried that Berlin will try to undermine the electric vehicle investigation, which has focused on Chinese carmakers BYD, Geely and SAIC.

Scholz is expected to have dinner with Macron and the two leaders’ wives in Paris on Thursday, according to two sources involved in the planning.

Xi will be in Europe between May 5th and 10th.