China stood up to Trump, and it's not giving Europe an inch, either

Business Standard

a day ago

Having forced the Trump administration into a trade truce through economic pressure and strategic defiance, China now appears to be playing the same kind of hardball with Europe.
It has retaliated against trade curbs, accused Europe of protectionism, slowed exports of critical minerals and further embraced Russia, with China's top leader himself pledging support for Moscow just days before a summit of European Union leaders that China is scheduled to host this week.
The moves are part of a tough posture that Beijing is taking in its trade and geopolitical disputes with Brussels. China wants Europe to lift heavy tariffs that it has imposed on Chinese electric vehicles and refrain from further restrictions on trade. EU leaders see Beijing as effectively supporting Russia in its war with Ukraine, and are also concerned that China is dumping artificially cheap products that could undermine local industries.
Beijing has learned that it has leverage it can use against outside pressure. It stood up to the Trump administration's punishing trade war by demonstrating how dependent global industry was on China for its supply of critical minerals. And Beijing likely assesses that it is in a stronger position because Western unity is fracturing, analysts say, with President Trump's 'America First' foreign policy weakening the historical bonds between Europe and the United States.
'Beijing perceives that the global order is in flux,' said Simona Grano, a China expert at the University of Zurich. 'From its perspective, the United States is overstretched and preoccupied with multiple conflicts around the world and domestic polarization.'
'And with signs of division or fatigue within the trans-Atlantic alliance, the Chinese leadership sees more room to assert its interests, not least in trade, tech and security,' Grano said.
That calculation has been evident in China's approach to the summit talks on Thursday, which will include its top leader, Xi Jinping, and Ursula von der Leyen, the president of the European Commission, as well as other senior European leaders. The two sides will be commemorating 50 years of diplomatic ties — the type of anniversary that ordinarily would be a chance for Beijing to showcase its partnerships.
Yet each detail of the meeting appears to underscore China's view of the power dynamic. The summit is being held in Beijing even though it was Brussels's turn to host the rotating event. The meeting will only last one day, according to the European Union, despite having been billed earlier as a two-day affair. Expectations for any concrete results from the summit are low.
The 27-nation European bloc is caught between wanting to cut a trade deal with the United States, which is putting pressure on the region to commit to taking a harder line on China, and the need to maintain stable ties with China.
But Brussels has grown more confrontational with Beijing in recent years about a massive trade imbalance that amounted to over $350 billion last year, as well as Beijing's alignment with Russia.
In a speech this month in the European Parliament, von der Leyen accused China of 'flooding global markets with cheap, subsidized goods, to wipe out competitors,' and of discriminating against European companies doing business in China. She also warned that China's support for Moscow in its war with Ukraine was creating instability in Europe.
She said she planned to raise these concerns with Chinese officials at the meeting in Beijing. China is unlikely to be accommodating of such criticisms at the summit, if its recent muscle flexing is any indication.
Mao Ning, a spokeswoman for China's foreign ministry, fired back at von der Leyen, saying it was the European Union's 'mind-set' that needed 'rebalancing,' not China's trade relationship with Europe.
Earlier this year, China slowed exports of rare earth minerals to Europe, sounding alarms at high-tech firms across Europe and triggering a temporary shutdown of production lines at European auto parts manufacturers. And this month, China hit back at European Union curbs on government purchases of Chinese medical devices by imposing similar government procurement restrictions on European medical equipment.
Despite its combative stance, Beijing cannot afford to push Europe too far. China needs European markets to absorb the glut of electric vehicles, batteries and solar panels its factories are making. Domestically, huge price wars have shrunk profits, prompting even Xi and other leaders to warn companies against engaging in 'disorderly and low-price competition.' And Europe's importance has only grown as the Trump administration tries to close off other markets to China.
'Europe remains an indispensable economic partner for China. But if Beijing overplays its hand, it could find itself more isolated,' Grano said.
Still, China has remained defiant when it comes to its close relationship with Russia — which Beijing considers an invaluable partner in counterbalancing the West. Europe has long complained that Beijing's purchases of Russian oil and its supplying of dual-use technologies has enabled the Kremlin to prolong its war in Ukraine.
China claims neutrality over the conflict, a position that has been met with deep skepticism in the West, in part because of the closeness of China and Russia. Xi called for Beijing and Moscow to 'deepen' their ties and 'safeguard' their 'security interests' when he met Russia's foreign minister, Sergei Lavrov, in Beijing last week.
And earlier this month, China's top diplomat, Wang Yi, privately told European Union officials in Brussels that it was not in Beijing's interests for the war to end because it might shift U.S. attention toward Asia, according to a European official briefed on the talks, who spoke to The New York Times on condition of anonymity to share details of remarks made in a closed-door meeting. Wang's remarks were first reported by the South China Morning Post.
China has not commented on what Wang reportedly said.
But Victor Gao, a former Chinese diplomat and vice president of the Center for China and Globalization, a Beijing-based think tank, argued that the assertion attributed to Wang did not make sense because China believes the United States is able to project its influence in both Asia and over the fate of Ukraine at the same time.
Gao was dismissive of European criticisms of China's relationship with Russia, saying that the region should essentially mind its own business and focus on improving the lives of its people.
'From the Chinese perspective, they are not qualified as a geopolitical rival,' he said. 'They think too much of themselves.'
China's strategy toward Europe is essentially to divide and conquer. It saw the European Union as hawkish and sought to minimize the impact of its policies while courting Europe's leading businesses, namely from Germany and France, Gao said.
Hopes that Beijing will ever help Europe pressure the Kremlin to end its war have 'faded away,' said Philippe Le Corre, a senior fellow at the Asia Society Policy Institute's Center for China Analysis, who is no more optimistic that Brussels and Beijing will compromise on trade.
'There is no trust between the two sides,' he said.