China-EU summit ends with no agreement on trade, Ukraine

Mark O'Neill December 14, 2023 07:52

The first in-person China-EU summit for four years ended with no agreement and the two sides far apart over the EU’s record trade deficit and Beijing’s support of Russia in its invasion of Ukraine.

In the summit, the top representatives of the European Union -- Charles Michel, President of the European Council, and Ursula von der Leyen, President of the European Commission -- met President Xi Jinping and Premier Li Qiang, in two separate sessions.

“The EU has a trade deficit of almost €400 billion. We need to make our trade and economic relationship more balanced and reciprocal. In the EU, we continue to work towards a real level playing field for our companies and we expect China to take more concrete action to improve market access and the investment environment for foreign companies,” Michel told a news conference after the meetings.

Von der Leyen said the sides discussed root causes of their trade imbalance, from a lack of access to the Chinese market and preferential treatment to Chinese firms, to overcapacities in Chinese production.

“Russia continues to look for ways to access technology to power its war,” Michel said. “Once again, we insisted that China should not supply military tools to Russia. We reiterated how important it is that China help to prevent Russia from circumventing sanctions.”

Xi said China and Europe should not view each other as rivals or "engage in confrontation," according to state media. He urged the EU to "eliminate all kinds of interference" in the bilateral relationship.

Li said China opposed the "broad politicisation and securitisation" of economic and trade issues in violation of the basic norms of market economies. “We hope that the EU will be prudent when introducing restrictive economic and trade policies and when using trade remedy measures to keep its trade and investment markets open," he said.
Grzegorz Stec, an analyst at the Brussels office of the Mercator Institute for China Studies, said Brussels wanted to show it had new policy tools to get serious with de-risking, while the key objective for China was to try to hinder the EU's progress on implementing policies related to de-risking.

Before the summit, China announced it would temporarily offer visa-free-entry to citizens from five EU countries — France, Germany, Spain, Italy, and the Netherlands. Also Lithuania said in early December that Beijing had lifted trade barriers imposed on its goods.

“Beijing is trying to stabilise its relationship with the EU by adopting strategic stalling measures such as the visa-free entry. This is not a major concession made by China. Domestic economic pressure is pushing Beijing to boost business exchanges and tourism with the EU. These measures fail to address the EU's fundamental concerns,” Stec said.

While China is not supplying weapons to Russia, its involvement in Russia’s war effort is increasing.

A report in the Kyiv Independent in August said that the Yermak-McFaul Expert Group on Russian Sanctions examined 174 foreign components from three drone models used by Russia to attack Ukraine — Shahed-136/131, Lancet, and Orlan-10. It found that 67 per cent of the components originated in China, with 17 per cent of those coming through Hong Kong, according to Ukraine's Presidential Office.

Sino-Russian trade this year will reach a record, exceeding US$200 billion. This includes vehicles, mobile phones, electronics, machinery and telecom equipment – many of these items can be used by Russia’s military.

In November, General Zhang Youxia, vice-chairman of the Central Military Commission met Russian President Vladimir Putin in Moscow. “In recent years, the development of China-Russia military ties has maintained strong momentum, with diversified highlights of cooperation in various fields,” he said. “China is willing to further deepen pragmatic military co-operation.”

He also met Defence Minister Sergei Shoigu, the man in charge of Russia’s war in Ukraine. This year Xi Jinping had held two meetings with Putin, in Beijing and Moscow.

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Mark O'Neill

A Hong Kong-based writer, teacher and speaker.