How China is Reshaping Its Economic Relations with Europe


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In early May 2024, Chinese President Xi Jinping embarked on a significant diplomatic mission to Europe, marking his first visit since the global pandemic began. This five-day tour included France, Serbia, and Hungary, reflecting China’s strategic objectives and foreign policy amid rising geopolitical tensions. The visit underscored China’s efforts to restructure its relationship with key European nations and mitigate economic and trade frictions with the EU. Xi Jinping’s European tour highlighted China’s intent to promote a multipolar world, reducing the United States’ hegemonic influence globally. Engaging with European nations, Xi sought to forge relationships that might loosen Europe’s historical ties with the U.S., encouraging a more balanced global power dynamic. The concept of European strategic autonomy, gaining momentum as Europe seeks greater independence in foreign policy and security matters, was a focal point during Xi’s discussions in France. By aligning China’s objectives with Europe’s aspirations, Xi aimed to drive a wedge between transatlantic allies, capitalizing on current tensions related to trade, technology, and security policies. The visit to Serbia coincided with the 25th anniversary of NATO’s accidental bombing of the Chinese embassy in Belgrade. This commemoration was strategically used to highlight historical grievances against NATO, resonating with current anti-NATO sentiments in Serbia and broader regional distrust towards Western military alliances. The event strengthened anti-Western sentiment and solidified China’s role as a partner that supports sovereignty against perceived Western aggression. Economic diplomacy played a significant role in Xi’s tour, particularly through the Belt and Road Initiative (BRI). In Hungary and Serbia, Xi emphasized deepening economic ties, with infrastructure projects like the Belgrade-Budapest railway serving as flagship examples. These projects not only enhance China’s economic influence but also demonstrate its commitment to the economic development of these nations, contrasting with the perceived economic dominance of the EU and U.S. President Xi Jinping’s European tour was an economic overture designed to address ongoing trade tensions and assert China as a critical economic partner for European nations. The visit occurred amidst mounting scrutiny of Chinese economic practices by the EU, particularly regarding investigations into Chinese electric vehicles and other industries. Xi’s discussions aimed to mitigate these tensions by advocating for open economic exchanges and warning against protectionist measures that could disrupt global supply chains. In France, economic debates focused on rebalancing the trade relationship, emphasizing reciprocal trade and mutual economic benefits. Both nations sought strategies for France to export more to China, aiming for a more balanced trade relationship. The discussions concluded with several agreements enhancing collaboration in aerospace, energy, and agriculture. In Serbia and Hungary, Xi’s visits underscored the strategic importance of these countries in the BRI. Projects like the Belgrade-Budapest railway not only boost local economies but also serve as a testament to China’s commitment to the region. These investments increase China’s influence in Eastern Europe, potentially creating divisions within the EU and between EU and non-EU states regarding policy towards China. Xi Jinping’s visit to France epitomized the nuanced and multi-layered relationship developed over decades between China and one of the leading powers in the EU. President Emmanuel Macron’s policy toward China illustrates a broader European dilemma: managing economic relations with a global superpower while securing geopolitical interests by maintaining alliances with the U.S. Macron’s strategy during Xi’s visit emphasized European strategic autonomy, advocating for Europe to be an independent actor capable of balancing superpowers. Economic discussions between Xi and Macron focused on trade practices, with France calling for a reduction in the trade deficit with China and addressing concerns about Chinese subsidies. Both leaders underscored the value of bilateral trade and economic collaboration, exploring avenues to enhance access to the Chinese market for French luxury goods, agriculture, and technology. Geopolitical topics, including China’s stance towards Russia and the ongoing conflict in Ukraine, were also significant. France, along with the majority of the EU, is concerned about China’s position on Russia, particularly regarding Ukraine. Macron likely sought to ascertain China’s stance on global security matters and urge Beijing to assume a more constructive role. Xi Jinping’s visits to Serbia and Hungary were integral to China’s strategy to cement its presence in Eastern Europe. These stops showcased how China leverages economic investments and strategic partnerships to create alliances within the EU and neighboring regions, challenging the cohesion of Western alliances. In both Serbia and Hungary, China has heavily invested in infrastructure projects under the BRI, such as the Belgrade-Budapest railway. These investments enhance local economies and serve as a testament to China’s commitment to the region. Such investments are strategically important for China as they increase its influence in these countries and, by extension, in Europe. China’s approach in Serbia and Hungary illustrates its broader geopolitical strategy of “divide and conquer” within the EU. By strengthening bilateral relations and offering economic incentives, China positions itself as a viable alternative to Western economic models and political alliances. Hungary, under Prime Minister Viktor Orbán, has frequently blocked EU resolutions critical of China, highlighting how Chinese influence can affect EU policy decisions from within. European leaders’ responses to Xi’s visit were mixed. In France, President Macron adopted a balanced approach, emphasizing the importance of maintaining strategic autonomy and free trade practices while avoiding compromising European values and interests. Eastern European leaders, particularly in Serbia and Hungary, expressed clear support for deeper ties with China, praising Chinese investments and strategic partnerships as key to their countries’ economic development. The European Commission and other EU bodies observed the situation with a combination of optimism and concern. The European Commission has been at the forefront of challenging China’s trade practices, advocating for enhanced enforcement mechanisms to ensure fair competition. Ursula von der Leyen, President of the European Commission, emphasized the necessity for China to adhere to international trade norms and warned that the EU is prepared to utilize its trade defense tools against China. The European Parliament and other EU institutions have expressed concerns about China’s human rights situation and its stance towards Russia, particularly regarding Ukraine. EU officials have issued warnings about the need to balance economic interests with ethical and security considerations. Xi Jinping’s European tour marked a significant moment in Sino-EU relations, reflecting China’s strategic ambitions and the complexities of its engagement with Europe. By emphasizing economic diplomacy and leveraging strategic investments, China aims to strengthen its influence in Europe, particularly in Eastern European countries. The EU’s response remains mixed, balancing economic cooperation with concerns about trade practices, human rights, and geopolitical stability. As China continues to assert itself as a global economic power, its relations with Europe will undoubtedly remain a critical area of focus in international diplomacy.

Written by: Nenad Stekić

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