What is expected from Xi Jinping’s trip to Europe?

During his high-profile trip to Europe, Chinese President Xi Jinping will seek to ease trade tensions with the EU and reinvigorate Chinese economic presence and influence in Central and Eastern Europe by announcing new investment and infrastructure projects. President Xi is traveling to Europe for the first time since 2019, for a five-day visit starting May 5 that will take him to Paris, Budapest and Belgrade. In France, Xi will meet French President Emmanuel Macron for a bilateral meeting and also a trilateral meeting with European Commission President Ursula von der Leyen, during which the Chinese President will seek to downplay China’s role in supporting of Russia’s military effort in Ukraine, promoting benefits of maintaining positive trade and economic relations with China for France and Europe as a whole. Macron, in turn, will use his meeting with Xi to discuss maritime security and promote de-escalation between China and the United States in the Indo-Pacific.

The French President will also take the opportunity to demonstrate his political leadership on Ukraine and European security, thus taking a firmer stance against China’s support for Russia. At the same time, Macron will present the case for increased Chinese investment in France’s green technology sector, particularly in the manufacture of electric vehicle (EV) batteries. During Xi Jinping’s visits to Hungary and Serbia, the Chinese leader is likely to unveil new small investments under Beijing’s Belt and Road Initiative (BRI) in both countries, including further economic support for the delayed Budapest-Belgrade railway project.

  • Macron held an informal meeting with German Chancellor Olaf Scholz in Paris on May 2 to coordinate their positions on EU-China relations ahead of Xi’s trip to France.
  • Xi also met with Soltz and Dutch Prime Minister Mark Rutte in Beijing in April and March, respectively.
  • Xi’s visit to Serbia (which is not an EU member state) on May 7 will coincide with the 25th anniversary of the NATO bombing of the Chinese embassy in Belgrade that killed three Chinese journalists — a symbolic event that shows the grievances of both countries with the West.
  • The BRI Belgrade-Budapest high-speed rail project started in 2019, but construction on the Hungarian side is progressing at a slow pace. Xi will likely announce financial assistance to speed up the project during his upcoming meetings in both countries. Greece also announced in February that it would join the project, extending the line to Athens.
  • Macron met with Xi in Guangzhou, China in April 2023, where the French President denounced the West’s disengagement from China and praised France’s strategic autonomy. He and European Commission chief von der Leyen also urged Xi to “reason” Russian President Vladimir Putin to end the war in Ukraine.

Beijing is seeking to undermine Brussels’ push to “disengage” Europeans from economic ties with China by exploiting internal differences among EU member states. Xi’s trip to Europe comes nearly a year after the European Union formally launched the “risk disengagement” campaign against China as part of the European bloc’s economic security strategy, which aims to reduce the European Union’s economic vulnerabilities and critical dependencies on rival countries, while strengthening its own industrial competitiveness and strategic manufacturing capacity technologies. Since then, Brussels has actively sought to protect domestic industries against subsidized Chinese competition. The European Union also pushed back on China’s overcapacity, its huge trade surplus and the lack of reciprocity for European companies doing business in China.

However, while the European Union is increasingly aligning its China-related rhetoric and policy goals with the United States’ aggressive approach, EU countries do not always agree on how to deal with Beijing. Indeed, many member states prefer a more balanced approach (including France and Germany, albeit to varying degrees) for fear that excessive restrictions could have too much of an impact on their economic ties with the East Asian giant.

In this context, Beijing seeks to maintain positive economic and trade relations with the European Union by exploiting the underlying political and economic divisions between individual EU member states. In this way, China pursues a strategy of “divide and conquer ,” in which he uses a combination of targeted economic coercion and co-optation to exploit divisions within the European bloc and effectively prevent it from adopting significant economic restrictions against China.

  • President Xi’s visit to Europe underscores the importance for Beijing of improving ties with key EU member states, or at least preventing them from deteriorating further — especially in light of the Chinese president’s significantly reduced international travel following the COVID-19 pandemic . This is a priority for China because many of the emerging industries in which China hopes to become a world leader (and thus push its economy into high-income status) are the same industries (such as “green technologies” and advanced semiconductors ) for which Europe is considering imposing trade barriers on China. Obviously, maintaining such a key export market for these high-quality products is central to China’s industrial development strategy.
  • In recent months, the European Commission has launched multiple “anti-dumping” investigations to combat unfair competition, with the aim of imposing duties calculated as a percentage of the tariff value of goods in order to prevent dumping [where dumping means “unfair competition” or otherwise “selling at a loss” and refers to the practice of selling products below the normal market price or at prices below the cost of production, with the aim of eliminating competition and the undisputed dominance of a company in a market ]. It also explores anti-subsidy practices, techniques, procedures and methods for imports of Chinese green technologies into the European bloc, highlighting Brussels’ increasingly assertive stance against China’s alleged unfair trade practices. This includes “anti-dumping” investigations into imports of Chinese electric vehicles and biodiesel [Biodiesel (also known as Fatty Acid Methyl Ester – FAME) is a type of biofuel, i.e. a motor fuel produced from biomass].
  • The Commission has also launched anti-subsidy investigations into imports of Chinese wind turbines in the complex, products of Chinese manufacturers of solar panels [a solar panel is a device that converts sunlight into electricity using photovoltaic cells], as well as Chinese-made trains on public competitions in Romania and Bulgaria, respectively. In addition, for the first time, the European Commission launched an investigation into China’s medical technology market using the so-called “International Procurement Instrument” of the European Union. Brussels also accused China of unfair market practices and encouraging industrial overcapacity that harms EU companies, as well as opaque market access terms and a lack of reciprocity for those EU companies operating in China.
  • French leader Macron supports a more aggressive EU stance on Chinese subsidies, while Scholz’s German counterpart has been far less supportive of ongoing EU probes into Chinese imports, fearing they could provoke retaliation from Beijing and end up hurting German exports to China.

During his trip to France, Xi will try to persuade Macron to push for a more pragmatic EU-China policy, but it is highly unlikely that this will yield concrete commitments from Paris to that end. Beijing’s divide-and-conquer strategy is unlikely to pay off in Paris on trade. In fact, France is the main country pushing the European Commission to launch its investigation into Chinese electric vehicle subsidies. Nevertheless, Xi still generally sees Macron as his key interlocutor to persuade the European Union to take a more pragmatic approach towards Beijing, given the French president’s previous calls for Europe to pursue an independent policy on China, rather than following the lead of the United States on issues such as technology restrictions, relations with Taiwan, or an expanded NATO role in Asia. However, it remains highly unlikely that Macron will explicitly call for an easing of Indo-Pacific “frictions” or commit to easing the EU-China economic decoupling when he meets Xi.

n Hungary and Serbia, President Xi will focus on economic cooperation to cement China’s image as a key partner in Central and Eastern Europe, which will likely include the announcement of new (albeit limited) Chinese investment and infrastructure projects. Meanwhile, during Xi’s trips to Hungary and Serbia – two countries that have long had close ties with China – the Chinese President will seek to expand economic cooperation to demonstrate China’s continued importance as a key partner for Central and Eastern Europe. However, given China’s shrinking international financial footprint, as well as its waning ambition for the BRI (as Beijing has recently shown it is shifting its focus to “small but beautiful” projects rather than massive infrastructure projects), any new projects announced due to Xi’s meetings in Hungary and Serbia will likely be small-scale.

Hungary, in particular, is a key tool of Beijing’s divide-and-conquer strategy in the European Union, given Hungarian Prime Minister Viktor Orbán’s now established role as a “standard villain” and opposition to EU decision-making (although Orbán’s ability to disrupt the EU’s trade restrictions is limited, since trade measures in the European bloc require only a qualified majority of member states for their approval). After Xi’s visit to Hungary, the two countries are expected to announce the opening of production facilities by Chinese automakers Great Wall Motor and BYD in Hungary (including an EV production facility in Szeged to serve the European market), as well as new BRI initiatives. Such initiatives serve, on the one hand, as a gesture of Hungary’s political alignment with Beijing, which respects that Budapest systematically opposes EU criticism of Beijing’s human rights record and Taiwan policy. Also these initiatives clearly underline the geographical and strategic importance of Eastern Europe as a truly valuable route for BRI projects connecting Asia to Europe.

  • Under Orban, Hungary has been an outspoken critic of the European Union and has adopted a pragmatic stance towards its economic relations, as evidenced by the country’s continued (and growing) dependence on Russian gas supplies, despite the ongoing war in Ukraine and despite pressure from Brussels to reduce European dependence on Russian energy. This makes Budapest an ideal partner for Beijing in the European Union.
  • Partly as a sign of China’s appreciation of its favorable political positions, Hungary has received significant Chinese investment over the years, including under the BRI infrastructure initiative, which Hungary joined in 2015.
  • Serbia is also an important strategic partner for Beijing in the Western Balkans, having signed a free trade agreement with China in October 2023, which will enter into force this July, with the majority of Serbia’s exports to China consisting of copper ore. In recent years, China has become Serbia’s largest trading partner and provider of foreign direct investment (second only to the EU as a whole), as well as a key partner in the development of Serbian infrastructure.

About the author

The Liberal Globe is an independent online magazine that provides carefully selected varieties of stories. Our authoritative insight opinions, analyses, researches are reflected in the sections which are both thematic and geographical. We do not attach ourselves to any political party. Our political agenda is liberal in the classical sense. We continue to advocate bold policies in favour of individual freedoms, even if that means we must oppose the will and the majority view, even if these positions that we express may be unpleasant and unbearable for the majority.

Leave a Reply

Your email address will not be published. Required fields are marked *