EU-China Summit Ends in Disagreement Over Trade and Geopolitics
Chinese President Xi Jinping and European Commission President Ursula von der Leyen recently met in Beijing to mark 50 years of diplomatic relations. However, the summit was cut short due to disagreements over trade and geopolitical issues, highlighting the complex nature of the EU-China relationship.
President Xi urged the EU to avoid 'strategic misjudgements' and called for deeper mutual trust. Meanwhile, von der Leyen described the EU-China relationship as having reached an 'inflection point' due to trade imbalances, industrial overcapacity, and geopolitical divergences. The EU's trade deficit with China reached a record €305.8 billion in 2024, further exacerbating tensions.
The EU has launched investigations into Chinese industrial subsidies and is concerned about Chinese involvement in Russia's military-industrial complex. European concerns also include allegations of deliberate overproduction by China in strategic sectors such as batteries, wind turbines, and electric vehicles. The ongoing EU anti-subsidy investigation into Chinese electric car exports may lead to provisional tariffs, potentially sparking a tit-for-tat trade dispute.
China has responded to these issues by imposing export controls on rare earth elements, disrupting key European supply chains and leading to temporary stoppages in automotive production. However, Chinese electric car makers like XPeng are adapting by localizing production in Europe, suggesting a preference for economic adaptation over direct confrontation. Von der Leyen emphasized the need for a 'rebalancing' of trade relations and for both sides to address respective concerns with real solutions.
The EU-China Summit in Beijing ended on a cautious note, with both sides acknowledging the need for dialogue and cooperation. However, the ongoing trade disputes and geopolitical tensions highlight the challenges in maintaining a balanced relationship. As the EU continues to define China as a 'partner, competitor, and systemic rival', it remains to be seen how these issues will be resolved in the coming months.
