14.05.2024.

Did China's Xi Jinping expose disunity in Europe?

The Chinese president's visit to Europe yielded little breakthrough on issues like trade and Ukraine. But it did show that Beijing prefers to work one-on-one to avoid collective opposition to its interests.

Chinese President Xi Jinping concluded a high-profile European tour on Friday amid concerns in Europe over Chinese support for Russia's war in Ukraine and European markets being flooded with cheap Chinese electric vehicles.

Xi's first visit to the region since 2019 also came amid growing suspicion that China is seeking to take advantage of divisions in Europe. And analysts pointed out that Xi's itinerary was no coincidence.

Bertram Lang, a research associate at Goethe University in Frankfurt who specializes in China's foreign policy, said the countries on Xi's tour — France, Serbia and Hungary — all have "special bilateral relationships" with Beijing.

Lang added that the Chinese leadership has gradually divided Europe into two groups, "those friendly and unfriendly to China." And this trip aimed to emphasize relationships with the former.

Xi pressed on trade imbalance in France

Xi began his tour in Paris, where his two-day state visit and talks with French President Emmanuel Macron focused on the war in Ukraine and trade imbalances with the EU.

While China and Xi prefer engagement at a bilateral level, Macron sought to demonstrate European unity by including European Commission President Ursula von der Leyen.

German Chancellor Olaf Scholz, who recently concluded a visit to China, was invited to Paris but did not attend. However, Scholz and Macron met ahead of Xi's visit on May 2 to touch base on China policy.

In Paris, Von der Leyen's public remarks took direct aim at what she called China's "market distortion practices" with massive subsidies for electric vehicle and steel industries. China has been criticized for "overcapacity" and dumping underpriced products into EU and US markets.

The European Commission announced it would launch anti-subsidy probes into Chinese electric vehicles and solar panels to determine whether to impose punitive tariffs on them.

During the trilateral meeting in Paris, von der Leyen told Xi that Europe "will not waver from making tough decisions needed to protect its economy and security."

In response to von der Leyen's remarks, Xi said there is no such thing as "China's overcapacity problem," whether from the perspective of comparative advantage or global market demand, state broadcaster Xinhua reported.

"We are seeing a stronger convergence in the EU between member states" and "a Commission that is quite determined" to level the playing field of trade with China, Zsuzsa Anna Ferenczy, a former political adviser in the European Parliament, told DW.

Nevertheless, Chinese state media framed Xi's France visit as a success. A report in the Global Times cited 18 "cooperation agreements" between government agencies in aviation, agriculture, people-to-people exchanges, green development and SME cooperation as a "positive signal for European entrepreneurs" and a "stabilizer to China-Europe trade ties" against economic "decoupling."

Xi stonewalls on Ukraine

On Ukraine, Beijing has still yet to convince leaders that it is not supporting Russia in the Ukraine war. China has also stonewalled on calls from European and US leaders to use its influence on Moscow to help play a constructive role in ending the conflict.

This is despite Xi supporting Macron's call of an "Olympic Truce" of all global conflicts during the Summer Games in Paris.

The US has said China is providing Russia with machine tools, drone engines and technology used for cruise missiles. China is also helping support Russia's economy by supplying industrial and consumer goods.

Xi responded strongly to these accusations in his public remarks in Paris, claiming the Ukraine crisis was "being used to cast responsibility on a third country, sully its image and incite a new cold war." He added that China was "not a participant" in the crisis.

Jean-Philippe Beja, a China expert and senior researcher at the Center for International Studies and Research at University Sciences Po in Paris, told DW that during the talks, Xi was made aware that Russia's war on Ukraine "is a matter of life and death for Europe."

"This is a highly negative factor in Sino-European relations," Beja said.

Ahead of Xi's visit, Chinese state media heaped praise on Macron's continued advocacy of "strategic autonomy" for Europe, which calls for the European Union to be more assertive on strategic and defense issues. China has interpreted this as a rejection of NATO and US-led collective strategy.

After visiting China in April 2023, Macron drew criticism for comments warning against Europe being drawn into a conflict between the US and China over Taiwan, namely that being a US ally doesn't mean being a "vassal" of Washington.

Writing about Xi's visit, Francois Godement, a China expert at French think tank Institut Montaigne, said Macron tried to "minimize these aspects" during the talks, while seeking to demonstrate European unity.

Serbia, Hungary major target of Chinese funds

The state visit turned more upbeat in Serbia and Hungary, both of which are major recipients of Chinese investment and maintain close ties with Russia.

Although Serbia is not an EU member state, Xi's visit to Belgrade projected an image of the Chinese leader "as a key figure not only in the EU, but in the EU's neighborhood," said Ferenczy, who is also an assistant professor at Taiwan's National Dong Hwa University.

Serbia is a major European recipient of Chinese loans under the Belt and Road Initiative, with infrastructure projects including a high-speed rail link to Hungary. Chinese companies are also involved in building sewer and wastewater plants, and operate a massive steelworks.

While lauding the deep economic ties, Xi's visit was also a chance to take a jab at NATO, as he arrived 25 years to the day when a NATO bombing campaign during the Kosovo war hit the Chinese Embassy in Belgrade.

"We must not forget that 25 years ago today, NATO brazenly bombed the Chinese Embassy in Yugoslavia," Xi wrote in a Serbian op-ed.

China building electric vehicles in Hungary

Xi's last stop was in Hungary, which has made no secret of its continued support within the EU for Russia. Budapest also plays a support role for Beijing within the bloc, with Prime Minister Viktor Orban's government having already vetoed numerous EU proposals condemning Chinese actions.

And as the EU grapples with how to deal with cheap Chinese electric vehicles flooding its market, Hungary is positioning itself as a production center for Chinese EV companies.

In December, Chinese EV maker BYD announced the construction of a passenger car factory in Szeged, Hungary, close to the border with Serbia, as China has become Hungary's No. 1 source of foreign direct investment.

Xi's visit also came as Hungary takes up the rotating presidency of the European Council on July 1.

Upon meeting with Orban, Xi said in their joint press conference that "China supports Hungary in playing a bigger role in the EU and promoting greater progress in China-EU relations."

Undermining unity?

Political analyst Ferenczy said China's overall strategy is to "undermine the EU's unity," while increasing influence in individual member states.

She added that Beijing's strategy is to go around the EU and give member states special access to its markets, attempting to "make these countries feel special that they have a privileged relationship with China."

"The future doesn't look better for EU-China after Xi Jinping's visit," she said. "There is a trust deficit between the two partners."

Ferenczy expects the EU will continue to push back while China will resist by continually reaching out to member states bilaterally to slow down their "appetite to de-risk."

Conclusion

There has been no progress in resolving the outstanding issues between the European Union and China following the visit of Chinese President Xi Jinping to EU member states, France and Hungary. This primarily concerns the significantly increased import of cheap electric cars and green technology from China into the EU, prompting an EU investigation into suspicions that Chinese manufacturers are subsidized by the state, thereby violating competition rules in the EU market. On the other issue, the war in Ukraine, China maintains its stance and continues to utilize cheap Russian raw materials on one hand, and exports materials that could be used for military purposes to Russia on the other.

On one side, it's a fact that China lucratively leverages its "neutrality" in Russia's war against Ukraine (cheap imports – expensive exports), while on the other hand, the essential political goal is to weaken the influence and oppose the expansion of NATO and the EU further into Eastern Europe. Additionally, China remains committed to its earlier proclaimed geostrategic orientation towards creating a "multipolar" world, essentially abandoning the rule-based world order.

During his visit to Serbia and Hungary, the Chinese president solidified strategic partnerships with these two countries, which are considered "Chinese" footholds in Europe and states where China can expand its political, economic, cultural, and other influences more or less unhindered. It should be noted that the ruling political elites in these two countries largely share China's vision of state governance, which is much closer to autocracy than the predominantly Western commitment to strengthening democracy and respecting human rights. This poses a danger not only to Serbia and Hungary but also to the Western Balkans region and the EU as a whole, as a return to autocracy would undoubtedly shake the foundations upon which the EU rests, and in the Western Balkans, it would likely cause new conflicts and instability.