03
May
2024
media Ifri in the Media
Marc JULIENNE, cited by Mailys PENE-LASSUS for Nikkei Asia

Xi Jinping's trip to Europe to center on trade as challenges 'pile up'

Chinese President Xi Jinping is set to embark on his first European diplomatic tour in five years, starting in France before traveling on to Serbia and Hungary.

nikkei_asia_logo.png

Trade will be at the heart of his discussions in Paris on Monday with French President Emmanuel Macron and European Commission President Ursula von der Leyen, who has also been invited. After this meeting, Xi and Macron are due to hold bilateral talks.

Xi's visit to Paris is also a celebration of 60 years of diplomatic relations between the two countries and comes just a year after Macron visited Beijing. But behind the cordiality, tit-for-tat trade action between Europe and China will dominate the agenda.

Beijing launched a probe on European liquors in January in response to an investigation by the EC -- the executive arm of the European Union -- into China's subsidies for its EV makers. Beijing's response clearly singled out products from France, as Paris had supported the EC probe.

While Macron and Xi will be keen to keep up appearances of getting along, "in reality, the challenges to the relationship are piling up, and the areas of opportunity are getting smaller and smaller," said Marc Julienne, head of China research at the French Institute of International Relations, a think tank.

Paris wants to convince Beijing to use its influence on Russian President Vladimir Putin to stop Moscow's invasion of Ukraine. China and Russia have referred to their relationship as one that was "without limits," and Beijing considers itself neutral about the Ukraine war.

"China must be made to understand that the war in Ukraine is an existential threat to European security," and, therefore, to its own commercial and diplomatic interests too, Julienne told Nikkei Asia.

Macron is expected to raise his concern that Chinese companies may be supporting Russia's war effort. On Thursday, Washington sanctioned some Chinese and Hong Kong companies for this reason.

Creating a level playing field for European and French companies is another priority for Macron. Paris had expressed "strong concerns" to Chinese authorities about government subsidies that have enabled Chinese companies to undercut prices elsewhere, the president's office told journalists earlier this week.

At the same time, they said France welcomed investment from Chinese high-tech companies, particularly in the manufacturing of EVs and their batteries.

"China's unfair competition in electric vehicles is having an extremely harmful impact," said Julienne. Around 13 million jobs in Europe rely on the auto industry, according to European Automobile Manufacturers' Association. "We're playing the same game, but not with the same rules," Julienne added.

Nonetheless, some are expecting announcements of investments during Xi's trip after the president's office told journalists that contracts were being discussed, without giving details.

On Tuesday, Macron and Xi are scheduled to take a more intimate trip, "allowing a frank and friendly exchange," according to the French president's spokespeople. The two leaders will visit a scenic mountain pass in the Pyrenees, in southern France, from where Macron's family hails. It will also give Macron a chance to showcase an iconic cycling spot ahead of this year's Paris Olympics, which start in July.

Xi is expected to head to Serbia on Tuesday, according to local media, citing the Serbian president's press office. On Wednesday, Xi is scheduled to move on to Hungary, where he would finish his trip on Friday.

These two countries are important allies in a region where Beijing is increasingly viewed with suspicion. China has invested heavily in Serbia and Hungary, an EU member. Hungarian Prime Minister Viktor Orban has, in turn, helped to push Beijing's agenda within the bloc.

"China is betting on the EU's most disruptive player," Julienne said, referring to Orban.

EVs will remain a central topic in these two countries. Hungary hopes to become a major EV battery manufacturing hub. China's EV champion BYD chose the country for its first European plant, and CATL is also developing battery factories to supply local EV manufacturers.

Xi's meeting with Serbian President Aleksandar Vucic will coincide with the 25th anniversary of a U.S. bombing of the Chinese Embassy in Belgrade, during a NATO operation on May 7, 1999.

The Serbian and Hungarian leaders were the only European head of states who attended Beijing's Belt and Road summit in 2023. China has invested in projects there, including a high-speed railway to connect Belgrade with Budapest.

 

>>> The article is available on Nikkei Asia's website. 

Keywords
Emmanuel Macron Sino-French Relations Xi Jinping China European Union France