BEIJING (AP) — Europe wants two things from China: First, a change in its relatively pro-Russian stance on the war in Ukraine. Second, a reduction in the trade imbalance: Chinese exports of goods to the EU exceeded its imports from the 27-nation bloc by 291 billion euros ($310 billion) last year.
It’s unclear whether this will go very far on either front.
German Chancellor Olaf Scholz became the latest European leader to leave China with a promise to talk but little more. Chinese statements on its meetings in Beijing this week do not appear to budge on the issues that divide the EU and China.
There are reasons for hope in Europe. China is eager for foreign investment to boost its flagging economy. And China has made efforts to improve relations, from Europe to the United States and Australia, despite its differences with them.
But these considerations may not outweigh China’s broader strategic reasons to align with Russia as it seeks an alternative to the U.S.-led global order and to promote its green energy companies as it tries to make the nation a technology leader.
A EUROPEAN CIVASSATION ON PRICES
The EU and the United States complain that Chinese policies to promote green energy have prompted companies to build too much manufacturing capacity for electric cars, solar panels and other related products.
Cheap exports have taken a toll on solar companies in Europe and America and pose a potential threat to other industries. The EU launched an investigation into Chinese subsidies last fall and could impose tariffs on electric vehicles exported from China.
China agreed to negotiate with the United States over production capacity, but remained committed to defending its exports of green energy products. They have “not only enriched global supply and eased global inflationary pressures, but also made important contributions to the global response to climate change and the green and low-carbon transition,” Chinese Leader Xi said Jinping to Scholz.
Overcapacity is also a problem for China. Experts called for better policy coordination. so that not all provinces favor the same industries. While this may prevent future problems, it will not reduce existing overcapacity.
Not everyone in Europe agrees that tariffs would be a good thing. China is a major market for many European companies, and some fear the tariffs could spark a trade war.
The German Chamber of Commerce said it wanted the focus to be on further opening Chinese markets to German companies. In line with this thinking, Scholz called for a reliable legal system, intellectual property protection and equal market access for foreign companies in China.
These questions have taken on increased importance as Chinese companies become leaders in innovation in key technologies. A recent Chamber survey of German companies found that 5% saw Chinese competitors as leaders in innovation, and 11% of them in the automotive sector.
“This is really a new topic,” said Maximilian Butek, executive director of the German Chamber of Commerce in East China. “And if these highly competitive businesses are still protected by the government, then we will face resulting global challenges. »
A FUNDAMENTAL DIVISION IN UKRAINE
If there is one issue that most European countries can agree on, it is the hope that China will rely on Russian President Vladimir Putin to stop the invasion of Ukraine, which is now in its third year and shows no signs of giving up.
Dutch Prime Minister Mark Rutte said three weeks ago in Beijing that he had asked Chinese leaders “to use all their weight (…) on Russia to influence the course of events”. Five days later, French Foreign Minister Stéphane Séjourné said after meeting his Chinese counterpart that France expected China to send clear messages to Russia on Ukraine.
This week, it was Scholz’s turn. “China’s word carries weight in Russia,” he said. “So I asked President Xi to put pressure on Russia so that Putin finally ends his senseless campaign, withdraws his troops and ends this terrible war.”
The problem is that Europe and China have fundamentally different starting points. Europe, alongside the United States, says Russia is wrong and should withdraw its forces and leave Ukraine. China does not blame Russia and says any peace deal will have to address Russia’s concerns as well as those of Ukraine and the West.
China has undermined Western sanctions by continuing its trade with Russia, and Scholz and others have expressed concern over reports that Chinese companies are selling “dual-use” items that help Russia build equipment military. China has criticized the United States and other countries for prolonging the fighting by supplying weapons to Ukraine.
“China has not supplied arms to either side, and it has the right to maintain normal economic and trade relations with Russia,” said Ding Chun, director of the University’s Center for European Studies. Fudan from Shanghai.
The Chinese government shares others’ desire to see an end to the fighting, but it appears unlikely to pressure Russia to withdraw. The Chinese statement on the Xi-Scholz negotiations did not respond to the German leader’s request.
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Associated Press researcher Yu Bing contributed.
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