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Thursday, May 9, 2024

Xi in Europe: Few Concessions on Trade, More Investments in Serbia, Hungary

China’s President Xi Jinping ↗ has started an official trip to Europe, which includes France, Serbia and Hungary, for the first time since 2019. Xi’s first stop was in Paris, where he met with French President Emmanuel Macron and European Commission President Ursula von der Leyen to discuss trade tensions and Ukraine war.

On Tuesday, Xi arrived in Serbia to mark the anniversary of the bombing of Belgrade’s Chinese Embassy in 1999 by NATO during the Kosovo war. Then on Wednesday, he landed in Hungary, his final stop, to meet one of his closest allies in Europe, Prime Minister Viktor Orbán.

Trade Discussions

In Paris, Macron and von der Leyen pressed Xi on trade imbalances, warning the Chinese president that the EU needed to protect itself from cheap Chinese goods to rebalance trade ties, reported the Financial Times.

Von der Leyen called the Chinese state subsidies “a matter of great concern,” as the EU is leading a series of anti-subsidy investigations into Chinese companies. After a meeting with Xi, she said: “We will defend our companies, we will defend our economies.”

In a joint appearance with Xi, Macron said: “Europe is the continent today with the most open market… we want to be capable of protecting our interests.”

Macron welcomes Xi Jinping

In September 2023, the EU Commission launched an investigation into Chinese electric vehicles ↗, prompting Beijing to retaliate with an anti-dumping investigation into brandy, which could hit French cognac industry.

After receiving Xi at the Elysée Palace in Paris and serving him high-end cognacs made by French producers, the French President thanked his Chinese counterpart for “openness regarding the provisional measures on French Cognac and his wish not to see them applied.”

A French diplomatic adviser said these measures entailed tariffs on brandy that could be postponed at least until China’s probe was concluded.

Productive Meetings

Amid Xi’s endeavors to reduce trade tensions, he called the exchanges “fruitful,” expressing his desire to deepen cooperation with France in areas such as agriculture, finance, nuclear power programs and aerospace. During his stay in France, French and Chinese companies signed several cooperation agreements, including metro construction contracts for France’s Alstom.

At the Franco-Chinese Business Council in Paris on Monday, Macron told delegates: “Our shared objective is to continue our relationship. There is no logic in decoupling from China. It’s a desire to preserve our national security, just as you do for your own,” reported VOA.

“It’s a desire for mutual respect and understanding, and a desire to continue to open up trade, but to ensure that it is fully fair at all times, whether in terms of tariffs, aid or access to markets,” he added.

According to Steve Tsang, director of the China Institute at the University of London School of Oriental and African Studies, Xi made no immediate concessions.

He said: “Xi Jinping does not feel that China has an overcapacity issue. And he feels that the European position on Chinese EVs, for example, is unreasonable.”

“But then of course he is also trying to engage with the French and potentially having a leading Chinese car manufacturer setting up facilities in France, as a kind of incentive to persuade that maybe it’s in France’s interest to engage with China and welcome Chinese EVs,” he told VOA.

In the same vein, Nicholas Bequelin, a senior fellow at Yale Law School’s Paul Tsai China Center, pointed out that trade divisions within the EU could play into Beijing’s favor, as it is a major exporter to Europe.

Bequelin said: “The trade deficit in Europe is huge and growing. The de-risking or anti-subsidy policies that the European Union wants to put in place will take a lot of time — and because they affect the different countries in the European Union differently, it is very difficult to get to an agreement.”

Russia Ties

Europe has growing concerns regarding China-Russia relations. Days before the breakout of the Russia-Ukraine war, Xi declared a “no limits” partnership during Russian President Vladimir Putin visit to Beijing in February 2022. Since then, China has given Russia diplomatic and economic support.

According to FT, Macron said he welcomed a pledge by Xi to “refrain from selling any weapons (to Russia), all aid to Moscow and to strictly control exports of dual-use goods” that can be used for military purposes.

The Chinese President said Beijing was not at the origin of the crisis. He told reporters on Monday: “We’re opposed to this crisis being used to throw responsibilities on to a third-party country, and used as incitement for a new cold war.”

Xi announced his support for the French president’s call for a global truce during the Olympic Games ↗, and both leaders called for a ceasefire in Gaza.

Both leaders and their wives with folklore dancers at the Pyrenees

In a personal gesture, Macron invited Xi into the Pyrenees Mountains on Tuesday. The two leaders and their wives watched traditional dancers before dining on locally produced ham, lamb, cheese and blueberry pie.

Xi in Serbia

On Tuesday evening, Xi arrived in Serbia marking the 25th anniversary of NATO’s bombing of the Chinese embassy in Belgrade during the Kosovo war in which three Chinese journalists were killed.

In an article for the Serbian website Politika ↗, Xi wrote: “We must never forget” the NATO bombing of the Chinese embassy. He said the “friendship of China and Serbia was soaked in the shared blood of the two nations and the close cooperation between them.”

On Wednesday, China and Serbia agreed to follow a “shared future,” reported Reuters. The two countries signed 29 agreements enhancing legal, regulatory and economic cooperation.

Serbian President Aleksandar Vucic told a large crowd gathered in front of the Serbian presidential palace to welcome Xi: “We are writing history today.”

Serbian President Aleksandar Vucic and Chinese President Xi Jinping shake hands on the day of their meeting

Serbia will also become the first European country in years to forge a free trade agreement with China when a deal signed last year comes into effect on July 1. The deal will guarantee tariff-free exports for 95% of Serbian products to China over the next five to 10 years.

Xi expressed China’s readiness to import more high-quality agriculture products from Serbia and welcome more direct flights between Belgrade and Chinese cities.

He said: “Serbia became China’s first strategic partner in central and Eastern Europe eight years ago, and it becomes the first European country with which we shall build a community with shared future.”

The two leaders said they would support each other’s sovereignty and territorial integrity, implying that Serbia recognizes Taiwan as part of China, while China views Kosovo as part of Serbia.

Arrival in Hungary

Xi arrived in Hungary on Wednesday evening to meet with Hungarian Prime Minister Viktor Orbán. Before his arrival, he wrote an article, published by Hungarian media group Magyar Nemzet ↗, praising the Hungarian government for pursuing an “independent” foreign policy and “defying” great power politics.

“We have gone through hardships together and defied power politics together amid volatile international relations. We have found our respective path for sovereign states to independently conduct friendly exchanges with other countries,” he said.

Xi praised Hungary as an “important trading partner and the number one target country for Chinese investments in the Central and Eastern European region.”

According to FT, Hungarian foreign minister Péter Szijjártó expected at least 16 deals to be signed with China during Xi’s visit, covering sectors including infrastructure, construction, and energy. He added that the two countries would start a cooperation program “encompassing the entire portfolio of nuclear energy.”

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Michael Maren
Michael Maren
Former marine biologist who likes to spend as much time in the tropics as possible, due to a horrible time I once had in Alaska. Brrrr.

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