The 50th anniversary of the establishment of diplomatic relations between China and the European Union looks set to pass with neither pomp nor circumstance after President Xi Jinping declined to visit Brussels for May 6 commemorations.

The mood is muted as both sides look for compromise in a world made more challenging by Donald Trump's second term as U.S. president. Last week's lifting of travel sanctions on some EU officials by Beijing could pave the way for the resumption of talks over an investment deal many years in the making. But with other European lawmakers still under sanction, experts say Beijing's move may have little impact.

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Another area of contention is China's support for Russia in its invasion of Ukraine. The EU has called on Xi to help rein in his counterpart, Vladimir Putin. At the same time, Chinese spying allegations on the continent have put EU leaders on edge, fearing a longer-term threat to the security of Europe, which itself is being destabilized by rising far-right parties keen to align with Putin or Xi.

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What are the main sticking points in the relationship?

The biggest problem for the EU is the trade deficit of 304 billion euros ($344 billion) it racked up against China last year. This bottleneck needs to be unlocked, analysts said.

"A reduction in this deficit, as a result of a trade rapprochement, could enable negotiations to better access the Chinese market for European companies, particularly in the health care, digital, financial services and automotive sectors," said Damien Ledda, chief investment officer and portfolio manager at Galilee Asset Management. European leaders want China to relax control over its industries and public tenders, giving them the same access that Chinese companies have in the EU.

"We don't invest in the sectors we want in China, but China can invest wherever it wants in Europe," said Marc Julienne, director of the Center for Asian studies at IFRI.

Apart from the EU's tariffs on China-made EVs, Beijing will also be keeping an eye on a tax on small parcels that the EU has been mulling. France last week moved to impose such a tax after the U.S. closed its de minimis loophole.

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