Xi, EU remain far apart on over-capacity, Putin

Mark O'Neill May 08, 2024 23:27

French President Emmanuel Macron rolled out the red carpet for visiting President Xi Jinping this week – but failed to change his views on the two issues most important to Europe – industrial over-capacity and Beijing’s support for Vladimir Putin.

In his first visit to Western Europe for nearly five years, Xi chose France as his first stop. The other two were Serbia and Hungary, the countries in Europe with which Beijing has the warmest relations.

“China’s surplus production is causing market distortions,” said Ursula von der Leyen, president of the European Commission, told Xi at their talks on Monday. “We will defend our companies, we will defend our economies.”

The EU is conducting an investigation into whether Chinese makers of electric vehicles (EVs) receive subsidies. This could lead to import tariffs against them entering the European market. Europe says that China has over-capacity in EVs, electric batteries, solar panels and other green-energy products.

Data from the European Chamber of Commerce in China shows that China has 60 per cent of global manufacturing capacity, 31 per cent of global production and 14 per cent of global consumption. It sells 23 million cars per year and in 2023 exported three million. Its annual capacity is 41-50 million – the difference of 27 million equals the entire production of US and Europe.

“There is no such thing as China’s over-capacity problem,” Xi told a media briefing in Paris.
In an article published last Friday, the National Development and Reform Commission said that China’s exports of EVs, lithium batteries, photovoltaic products and other items enriched the global supply chain and alleviate global inflationary pressure.

“The alleged ‘over-capacity’ in China’s new energy sector appears to be nothing more than a meticulously constructed ploy by some countries,” it said. Protectionist measures arising from this restricted market competition and shielded outdated production capabilities and threatened global industrial progress, it said.

In his statements in Paris, Xi did not address the issue of the threat China’s EV exports pose to European manufacturers.

On the war in Ukraine, Macron said that he welcomed a pledge by Xi to “refrain from selling any weapons to Russia and strictly control exports of dual-use goods that can be used for military purposes.”

Xi said: “Beijing was not at the origin of the crisis. We are opposed to this crisis being use to throw responsibilities onto a third-party country and used as incitement for a new cold war.”

The reality is not so simple. Video from the front-line in eastern Ukraine shows Chinese buggies and vehicles used by the Russian army, with some destroyed by Ukrainian drones and artillery. Videos have also shown Chinese volunteers fighting for Russia in the war.

In late April, NATO Secretary-General Jens Stoltenberg said that China was “propping up Russia’s war economy. Last year Russia imported 90 per cent of its microelectronics from China, used to make missiles, tanks and aircraft. China is also working to provide Russia with improved satellite capabilities and imagery. All of this helps Moscow to inflict more death and destruction on Ukraine.”
In April, U.S. Secretary of State Antony Blinken told EU and NATO foreign ministers that Beijing was assisting Moscow “at a concerning scale”, and providing “tools, inputs and technical expertise”, with the assistance particularly focused on Russia’s production of optical equipment and propellants and its space sector.

For its part, Beijing has said that the U.S. should not blame China while supporting Ukraine with large amounts of aid, which was “hypocritical and irresponsible”. Such aid is prolonging the war, it said.

The EU sees Xi as the only leader in the world with influence over Putin and who might persuade him to stop the war. But, in Paris, he said nothing about using such influence.

To drive the message home, he selected as his other two stops in Europe the countries that are the most pro-Russian and anti-NATO. In Belgrade, he will join events to mark the bombing 25 years ago of the Chinese embassy by NATO aircraft. The U.S. said it was a tragic mistake, but Beijing does not believe this.

On Tuesday Putin officially began his fifth mandate as president. He plans to pursue his terrible war, which has already killed tens of thousands of Ukrainians, civil and military, and tens of thousands of his own soldiers. Xi’s visit to Paris has not changed by one iota Putin’s Hitlerian ambitions.

Mark O'Neill

A Hong Kong-based writer, teacher and speaker.