EU – China Summit

The EU-China summit was held in Beijing on the 24^th of July to mark 50 years of diplomatic relations. The summit included talks between the President of the European Council, António Costa, and, European Commission President Ursula von der Leyen, who met with China’s President, Xi Jinping. The summit also included a meeting with Premier Li Qiang in the afternoon, which was also included the High Representative of the EU for Foreign and Security Policy, Kaja Kallas.

With ongoing trade and investment tensions and rising strategic mistrust over the war in Ukraine and China’s tacit support for Russia, expectations heading into the summit were low. Moreover, the summit was originally planned to be spread across two days with a visit to Hefei, but was unilaterally cancelled by Beijing, which it said was cancelled due to “scheduling conflicts.”

Over the past year, the EU and China have engaged in tit-for-tat tariffs with the EU imposing duties on Chinese electric vehicles (EVs) over complaints of overcapacity in the European market, while Beijing retaliated with duties imposed on European liquor and implemented export controls on rare earths and medical devices.

The EU and China have a trading relationship worth €730 billion, with a trade deficit of over €305 billion. During the discussions, von der Leyen referred to the deficit by telling Xi Jinping that as “cooperation has deepened, so have imbalances,” adding that “We have reached an inflection point” and that Beijing should “come forward with real solutions”.

President Xi responded by saying “improving competitiveness cannot rely on ‘building walls and fortresses’ adding that “it is hoped that the European side will keep the trade and investment market open and refrain from using restrictive economic and trade tools”.

Despite tensions, there was modest progress made on rare earths and permanent magnets, where both sides agreed to an upgraded dialogue on export controls that would enable the EU to step in and mediate if European companies faced delays in accessing critical raw materials.

Meanwhile, António Costa urged China to “use its influence” to help end Russia’s “war of aggression”. However, China’s foreign minister had previously told Kaja Kallas that Beijing did not want to see Russia lose the war in Ukraine as it would keep the US distracted from its strategic competition with China. Furthermore, President Xi’s decision to visit Moscow in May for the World War Two parade and reject the invitation to visit Brussels further reinforced the EU’s distrust of Beijing’s role in the war in Ukraine.

Going forward, von der Leyen made it clear to Xi Jinping that Beijing’s stance on the war will be a “determining factor” in the future of EU-China. However, despite the salience the EU has attached to the war in Ukraine to European security, Beijing has remained defiant in its strategic partnership with Russia despite EU criticism.

Both sides agreed to a joint statement on climate change and carbon emissions, noting that both sides agreed to uphold the goals of the Paris agreement and enhance “bilateral cooperation” in the field of green transition, specifically in areas such as “energy transition, adaptation, methane emissions management and control, carbon markets and green and low-carbon technologies.”

Across all key issues at the EU-China summit, an agreement on climate change was considered the low-hanging fruit. Meanwhile, the lack of substantive progress on areas of trade, energy and security (specifically Ukraine) is indicative of the state of relations between the EU and China. While the summit maintains lines of communication in a time of deep uncertainty, the meetings also accentuated the structural differences between both blocs that are unlikely to be resolved anytime soon.

Meanwhile, the EU is attempting to strengthen its hand by enhancing relationships in the Indo-pacific, most notably signing a joint statement with Japan. Furthermore, a key priority for the EU was reaching a deal with Washington in their meeting in Scotland on Sunday the 27^th of July ahead of the US tariff deadline on August 1^st. The meeting between von der Leyen and US President Trump concluded with a flat 15% tariff on EU imports into the US. While analysts have concluded the EU ‘capitulated’ to US demands, von der Leyen creates “certainty in uncertain times”. While more detail’s of the deal will be ironed out over the coming weeks, the consequence of the deal will likely dictate the future of EU-China relations.