Latest news with #EUChinaRelations
CNA
5 days ago
- Business
- CNA
EU says China's links with Russia now 'determining factor' in ties
BEIJING: EU chief Ursula von der Leyen warned on Thursday (Jul 24) that China's ties with Russia were now the "determining" factor in its relations with the European Union, as she wrapped up a tense summit in Beijing that also saw China agree to speed up exports of rare earth minerals to the bloc. China's leadership has sought to draw the European Union closer as it positions itself as a more reliable partner than the United States and a bedrock of stability in a troubled world. But while nominally intended to celebrate 50 years of diplomatic ties, the EU has made clear there are deep divisions over trade, fears that cheap, subsidised Chinese goods could overwhelm European markets and Beijing's tacit support for Russia's war against Ukraine. Brussels says China's deepening political and economic relations with Moscow since the 2022 invasion have helped Russia's economy weather sweeping Western sanctions. Beijing denies that claim. Wrapping up that summit, von der Leyen told a news conference in Beijing that the bloc had made clear that the issue was now the "determining" factor in its relations with China. She and European Council President Antonio Costa expressed "our expectations that China would follow up on our concerns and the expectation that it would use its influence to bring Russia to accept a ceasefire, to come to the negotiation table, enter peace talks and put an end to the bloodshed", von der Leyen said. She also said the bloc agreed with Beijing to an "upgraded" mechanism for Chinese exports of rare earth minerals - another key sticking point in ties. China dominates the global industry for extracting and refining rare earths. Since April, it has required licences to export some of the strategic materials, triggering anxiety among businesses worldwide. "If there is a delay ... we have now established a mechanism where the companies can immediately ask us to mediate and to find out why there's a delay on the delivery of the critical raw materials," von der Leyen said. And Costa said the officials had raised human rights concerns with Chinese counterparts. "DEEPEN COOPERATION" China, in contrast, framed Thursday's summit as a way for the bloc and Beijing to deepen trust in a turbulent world. Welcoming von der Leyen and Costa at Beijing's ornate Great Hall of the People, President Xi Jinping said "the more severe and complex the international situation is, the more important it is for China and the EU to strengthen communication, increase mutual trust and deepen cooperation". "The challenges facing Europe at present do not come from China," he said, calling on both sides to "make correct strategic choices". Costa also stressed to the Chinese leader that the EU wanted to see "concrete progress on issues related to trade and the economy, and we both want our relationship to be ... mutually beneficial". Chinese Premier Li Qiang told the EU leaders in a separate meeting that "close cooperation" was a "natural choice" for the two major economies. "As long as both China and the EU earnestly uphold free trade, the international economy and trade will stay dynamic," he said. CLIMATE AGREEMENT In rare agreement, China and the EU vowed to "step up" efforts to address climate change. The warming planet is historically an area of convergence between Brussels and Beijing, with both willing to cooperate on combating climate change. Chinese and European leaders agreed on enhancing bilateral cooperation in energy transition and committed to accelerating global renewable energy deployment, a joint statement said. The EU also flagged its yawning trade deficit with China that stood at around US$360 billion last year and which von der Leyen described as "unsustainable". Beijing dismissed those concerns, insisting that Brussels must "rebalance its mentality", not its economic ties with China. If EU concerns were not addressed, "our industry and citizens will demand that we defend our interests", von der Leyen told Premier Li. The EU has imposed hefty tariffs on electric vehicles imported from China, arguing that Beijing's subsidies unfairly undercut European competitors.
CNN
22-07-2025
- Business
- CNN
Analysis: Both targets of Trump's tariffs, the EU and China still can't get along
As the two biggest economic targets in Donald Trump's trade war, some analysts thought the European Union and China could move closer together and stake out common ground. But a summit between the two sides in Beijing on Thursday is instead expected to showcase the deep-seated frictions and mistrust that are widening a rift between the two heavyweights. European Council President Antonio Costa and European Commission President Ursula von der Leyen are set to meet Chinese leader Xi Jinping and hold summit talks with Chinese Premier Li Qiang in Beijing. The meeting comes as both countries have faced heightened tariffs on their exports to the US – with uncertainties in US trade relations driving Beijing to look to tighten ties with the EU and other major economies. But a list of grievances between the two sides are setting that goal out of reach. The EU was far from shy about its concerns in the lead up to the summit. Officials in recent weeks have reiterated their long-standing concerns over what they say are inexpensive Chinese goods 'flooding' European markets, raised alarms about Beijing's move to squeeze the rare earths supply chain, and decried its ongoing backing for Russia as it wages war in Ukraine. Beijing has lashed out against those concerns, including the 27-member bloc's move last year to raise tariffs on its electric vehicles, launching a range of its own trade probes in apparent retaliation. After the EU last month announced it was barring Chinese companies from participating in public tenders for medical devices over a certain value, Beijing hit back with its own curbs on government purchases of Europe-made devices. On Monday, China's Ministry of Commerce slammed the EU decision to include two Chinese banks and a handful of other firms in its latest sanctions against Russia over its invasion of Ukraine. It claimed the move would have a 'severely negative impact on China-EU economic and trade relations.' All this sets the stage for a contentious summit, ostensibly meant to celebrate 50 years of relations, that's already been whittled from a planned two days to a single-day event. 'We should expect a very difficult moment and not a deal making moment,' said Abigaël Vasselier, head of the Foreign Relations team at MERICS think tank in Germany, during a media briefing this week. And in some ways that mirrors frictions between the China and the US, she added: 'China has created leverage over Europe, has gone into a tit-for-tat escalation with Europe, and has linked all issues. You could almost say this looks like a Trump playbook used by China on Europe.' Trump's trade war – and his negotiations with both major economies – is also casting a long shadow over the summit. There were signs earlier this year that Beijing hoped shared adversity in the face of tariff threats from the US could push China and Europe together. And earlier this month, Beijing granted a reprieve for Europe's major cognac makers following an anti-dumping probe widely seen as retaliation for the bloc's imposition of up to 45% tariffs on its electric vehicles last year. But in separate addresses to G7 leaders and European lawmakers in recent weeks, von der Leyen made clear the bloc's deep concerns about Beijing had been unresolved. 'China is using this quasi-monopoly (on rare earths) not only as a bargaining chip, but also weaponizing it to undermine competitors in key industries,' she said to G7 leaders meeting in Canada in June. Beijing has extensive control over supply chains for these critical minerals key in everything from EV batteries and cell phones to fighter jets and roiled global manufacturing after placing export controls on some such minerals amid its trade spat with the US. China agreed during a truce with the US in June to ease these controls. Von der Leyen also called for unified G7 action to pressure Beijing as it 'floods global markets with subsidized overcapacity that its own market cannot absorb.' While von der Leyen has long been hawkish on Beijing, voices in China have seen her as pandering to the US to ease trade frictions – and are watching closely for signs that a potential US-EU trade deal could target their economy. But China's leaders are also joining this week's summit in what they see as a relatively strong position relative to the EU when it comes the US talks. Beijing sees its decision to play hardball with the US, by raising tit-for-tat levies and then showing the power of its rare earths leverage, as paying off – bringing the US to the negotiating table twice and resulting with an agreement for a trade framework. Even as frictions remain - including China's purchases of Russian oil and Washington's elevated tariffs on Chinese goods - Beijing has already chalked wins, like the announced resumption of sales of Nvidia's H20 AI chips to China, in a reversal of an April US export ban. The EU, meanwhile, is scrambling ahead of an August 1 deadline to cut a deal with the US to avert heavy tariffs – and may see more at stake than their Chinese counterparts. 'The worst-case scenario would be for Europe to find itself in a two-front trade war with the US and China at a time when Trump is pressing for some sort of Faustian bargain with Beijing,' said Noah Barkin, a Berlin-based visiting senior fellow at the German Marshall Fund of the United States think tank. With this backdrop, chances for any concrete outcomes appear low to observers on both sides, who instead stress that dialogue can be a form of progress in itself. Europe has been clear that it doesn't want to cut ties with China, but rather 'rebalance' its economic relationship, which saw a more than 300 billion Euro deficit last year. It also aims to 'derisk' its supply chains, and work together with China on shared global issues like climate change – a potential area of agreement this week. But experts say a key hold-up for Europe has been a sense that Beijing is unmoved by Brussels' core concerns. 'We haven't had an EU-China summit that produced real deliverables for many years and this one won't be any different. That is a reflection of Beijing's refusal to address the EU's two biggest concerns: an increasingly imbalanced economic relationship that poses a growing threat to European industry and China's ongoing support for Russia,' said Barkin. China has rejected Europe's concerns about industrial overcapacity leading to a flood of exports as baseless, with one state media outlet recently saying that instead of 'rebalancing trade,' Europe to 'needs to recalibrate its mentality.' Instead, Beijing is expected to continue to push for setting minimum prices of Chinese-made EVs in Europe instead of tariffs, as well as unfettered access to European technology and markets. And even as Russia ramps up its assault on Kyiv, Beijing is unlikely to give any sign of a shift in that position on Moscow, its close partner. Chinese Foreign Minister Wang Yi reportedly told the European Union's top diplomat earlier this month that Beijing can't accept Russia losing its war against Ukraine as this could allow the United States to turn its full attention to China. China has long claimed neutrality in the war and defended its 'normal trade' with Russia, while ramping up purchases of its oil and shipping goods Western leaders say power Russia's defense industry. But observers in China still feel there's room for collaboration as the two sides sit down on Thursday. 'To solve challenges from climate change to AI and global conflicts, the European Union needs China, and China needs the European Union,' according to Wang Yiwei, director of the Institute of International Affairs at Renmin University in Beijing. Alluding to the view that the EU can be a counterweight for China against US frictions and a partner in promoting globalization, he added: 'If China and the European Union seek win-win cooperation, the so-called new Cold War cannot prevail.'
CNN
22-07-2025
- Business
- CNN
Analysis: Both targets of Trump's tariffs, the EU and China still can't get along
As the two biggest economic targets in Donald Trump's trade war, some analysts thought the European Union and China could move closer together and stake out common ground. But a summit between the two sides in Beijing on Thursday is instead expected to showcase the deep-seated frictions and mistrust that are widening a rift between the two heavyweights. European Council President Antonio Costa and European Commission President Ursula von der Leyen are set to meet Chinese leader Xi Jinping and hold summit talks with Chinese Premier Li Qiang in Beijing. The meeting comes as both countries have faced heightened tariffs on their exports to the US – with uncertainties in US trade relations driving Beijing to look to tighten ties with the EU and other major economies. But a list of grievances between the two sides are setting that goal out of reach. The EU was far from shy about its concerns in the lead up to the summit. Officials in recent weeks have reiterated their long-standing concerns over what they say are inexpensive Chinese goods 'flooding' European markets, raised alarms about Beijing's move to squeeze the rare earths supply chain, and decried its ongoing backing for Russia as it wages war in Ukraine. Beijing has lashed out against those concerns, including the 27-member bloc's move last year to raise tariffs on its electric vehicles, launching a range of its own trade probes in apparent retaliation. After the EU last month announced it was barring Chinese companies from participating in public tenders for medical devices over a certain value, Beijing hit back with its own curbs on government purchases of Europe-made devices. On Monday, China's Ministry of Commerce slammed the EU decision to include two Chinese banks and a handful of other firms in its latest sanctions against Russia over its invasion of Ukraine. It claimed the move would have a 'severely negative impact on China-EU economic and trade relations.' All this sets the stage for a contentious summit, ostensibly meant to celebrate 50 years of relations, that's already been whittled from a planned two days to a single-day event. 'We should expect a very difficult moment and not a deal making moment,' said Abigaël Vasselier, head of the Foreign Relations team at MERICS think tank in Germany, during a media briefing this week. And in some ways that mirrors frictions between the China and the US, she added: 'China has created leverage over Europe, has gone into a tit-for-tat escalation with Europe, and has linked all issues. You could almost say this looks like a Trump playbook used by China on Europe.' Trump's trade war – and his negotiations with both major economies – is also casting a long shadow over the summit. There were signs earlier this year that Beijing hoped shared adversity in the face of tariff threats from the US could push China and Europe together. And earlier this month, Beijing granted a reprieve for Europe's major cognac makers following an anti-dumping probe widely seen as retaliation for the bloc's imposition of up to 45% tariffs on its electric vehicles last year. But in separate addresses to G7 leaders and European lawmakers in recent weeks, von der Leyen made clear the bloc's deep concerns about Beijing had been unresolved. 'China is using this quasi-monopoly (on rare earths) not only as a bargaining chip, but also weaponizing it to undermine competitors in key industries,' she said to G7 leaders meeting in Canada in June. Beijing has extensive control over supply chains for these critical minerals key in everything from EV batteries and cell phones to fighter jets and roiled global manufacturing after placing export controls on some such minerals amid its trade spat with the US. China agreed during a truce with the US in June to ease these controls. Von der Leyen also called for unified G7 action to pressure Beijing as it 'floods global markets with subsidized overcapacity that its own market cannot absorb.' While von der Leyen has long been hawkish on Beijing, voices in China have seen her as pandering to the US to ease trade frictions – and are watching closely for signs that a potential US-EU trade deal could target their economy. But China's leaders are also joining this week's summit in what they see as a relatively strong position relative to the EU when it comes the US talks. Beijing sees its decision to play hardball with the US, by raising tit-for-tat levies and then showing the power of its rare earths leverage, as paying off – bringing the US to the negotiating table twice and resulting with an agreement for a trade framework. Even as frictions remain - including China's purchases of Russian oil and Washington's elevated tariffs on Chinese goods - Beijing has already chalked wins, like the announced resumption of sales of Nvidia's H20 AI chips to China, in a reversal of an April US export ban. The EU, meanwhile, is scrambling ahead of an August 1 deadline to cut a deal with the US to avert heavy tariffs – and may see more at stake than their Chinese counterparts. 'The worst-case scenario would be for Europe to find itself in a two-front trade war with the US and China at a time when Trump is pressing for some sort of Faustian bargain with Beijing,' said Noah Barkin, a Berlin-based visiting senior fellow at the German Marshall Fund of the United States think tank. With this backdrop, chances for any concrete outcomes appear low to observers on both sides, who instead stress that dialogue can be a form of progress in itself. Europe has been clear that it doesn't want to cut ties with China, but rather 'rebalance' its economic relationship, which saw a more than 300 billion Euro deficit last year. It also aims to 'derisk' its supply chains, and work together with China on shared global issues like climate change – a potential area of agreement this week. But experts say a key hold-up for Europe has been a sense that Beijing is unmoved by Brussels' core concerns. 'We haven't had an EU-China summit that produced real deliverables for many years and this one won't be any different. That is a reflection of Beijing's refusal to address the EU's two biggest concerns: an increasingly imbalanced economic relationship that poses a growing threat to European industry and China's ongoing support for Russia,' said Barkin. China has rejected Europe's concerns about industrial overcapacity leading to a flood of exports as baseless, with one state media outlet recently saying that instead of 'rebalancing trade,' Europe to 'needs to recalibrate its mentality.' Instead, Beijing is expected to continue to push for setting minimum prices of Chinese-made EVs in Europe instead of tariffs, as well as unfettered access to European technology and markets. And even as Russia ramps up its assault on Kyiv, Beijing is unlikely to give any sign of a shift in that position on Moscow, its close partner. Chinese Foreign Minister Wang Yi reportedly told the European Union's top diplomat earlier this month that Beijing can't accept Russia losing its war against Ukraine as this could allow the United States to turn its full attention to China. China has long claimed neutrality in the war and defended its 'normal trade' with Russia, while ramping up purchases of its oil and shipping goods Western leaders say power Russia's defense industry. But observers in China still feel there's room for collaboration as the two sides sit down on Thursday. 'To solve challenges from climate change to AI and global conflicts, the European Union needs China, and China needs the European Union,' according to Wang Yiwei, director of the Institute of International Affairs at Renmin University in Beijing. Alluding to the view that the EU can be a counterweight for China against US frictions and a partner in promoting globalization, he added: 'If China and the European Union seek win-win cooperation, the so-called new Cold War cannot prevail.'
Bloomberg
22-07-2025
- Business
- Bloomberg
Trump's Tariffs Force Europe to Rethink Ties With China
On today's Big Take Asia podcast, how Trump's tariff war is changing the EU's approach to investments from China and whether that could bring the two closer together. Never miss an episode. Follow The Big Take daily podcast today. This week, top European Union leaders are traveling to Beijing for a high-level summit which could set the tone for the relationship between the EU and China for years to come.
Arab News
19-07-2025
- Business
- Arab News
Why EU's ties with China are likely to remain tense
Relations between the EU and China last reached a mini-high during Donald Trump's disruptive first presidency, when Beijing and Brussels agreed a Comprehensive Agreement on Investment. However, bilateral ties have not warmed during Trump's second term in the White House, despite the US president threatening to instigate several new trade wars with his tariff policies. Certainly, the mood between the EU and China is generally constructive and both sides are keen to showcase some achievements in relations during this landmark year, which marks the 50th anniversary of bilateral ties. This includes during their upcoming annual summit on July 24, when European Commission President Ursula von der Leyen and European Council President Antonio Costa will hold talks with Chinese President Xi Jinping and Premier Li Qiang. Both sides stress that they have no insuperable conflicts of interest, and instead share common economic and political interests that are deepening. Underneath this high diplomacy, however, growing challenges are chilling relations, including the issue of the war in Ukraine. Take the example of rare earths. This is a topic on which von der Leyen and Costa will this week urge China to end restrictions that require EU-based exporters to secure licenses from Beijing, which controls more than 90 percent of the global processing capacity for these key metals. During the G7 Summit in June, von der Leyen accused China of 'coercion' and 'blackmail' over the measures, asserting that 'no single country should control 80-90 percent of the market for essential raw materials and downstream products like magnets.' On the economic front, China's trade surplus with the EU hit a record high in May, and now stands at about €400 billion ($465 billion). One of the steps the EU has taken in response is to levy tariffs of up to 35 percent on Chinese electric vehicles, citing unfair subsidies. Beijing retaliated with inquiries into the European dairy and brandy sectors. In the face of these proliferating challenges, von der Leyen, Costa, and other top EU officials are trying to build a broader, bloc-wide stance on China. This reflects the fact that Brussels has struggled at times to find common purpose across all 27 EU member states on the issue, especially those such as Hungary that are more sympathetic to Beijing. Worse still, leading EU officials have become increasingly concerned in recent years about whether the nature of China's external interventions in Europe represent a strategy of divide-and-rule in an attempt to undermine the continent's collective interests. The former EU foreign affairs chief, Joseph Borrell, even asserted that Beijing was a 'systemic rival that seeks to promote an alternative model of governance' to that of Europe. Von der Leyen said more recently that 'China has an entirely different system' with 'unique instruments at its disposal to play outside the rules.' Brussels has sought to unite the bloc around a stronger policy toward China. Andrew Hammond The backstory to this is that Europe is becoming an increasingly important foreign policy focal point for Beijing, economically and politically. The rising superpower had generally enjoyed growing influence across much of the region, at least until the COVID-19 pandemic. In the past five years, however, since the pandemic and Russia's invasion of Ukraine, relations have become chillier. This has affected issues such as climate cooperation, with doubts reported about whether Beijing and Brussels will sign a joint climate action pledge during their upcoming summit, despite the precedent of previous important collaboration in this area. Brussels has therefore sought to unite the bloc around a stronger policy toward China, with von der Leyen taking the lead on the issue, even though the role of European Commission president does not include any formal foreign policy mandate. While the EU still deeply values its relationship with China, the direction of travel for policy on Beijing appears to be moving in a more hawkish direction. Even on issues in which breakthroughs have been made with China over the past five years, such as the Comprehensive Agreement on Investment in 2020, ratification of this key economic deal has stalled for years in the European Parliament as a result of deteriorating relations. A central challenge for von der Leyen, however, remains the splits within the 27-member bloc regarding views on Beijing. It is too simplistic to characterize this as an East-West dichotomy within the region, not least because Hungarian Prime Minister Viktor Orban is perhaps China's biggest cheerleader in the EU. There are nonetheless differences in outlook, primarily between hawkish Eastern European nations such as the Czech Republic, Poland, and Lithuania, versus Western counterparts such as France and Spain that do much more bilateral business with China. The positions of those Western European nations can be particularly problematic for Brussels, given that both Paris and Madrid want extensive economic engagement with China to continue. The longstanding, deep business ties between Paris and Beijing are widely documented, so it is no surprise that President Emmanuel Macron is sometimes more equivocal than von der Leyen on the issue of China. During a joint visit with her to Beijing in 2023, the French president raised eyebrows in Europe by taking a large business delegation with him. He also utilized the language of economic reciprocity, rather than the European Commission president's preferred choice of 'derisking,' and did not appear to put significant pressure on China regarding its support for Russia in Ukraine. This challenging context underlines why the upcoming summit might underdeliver on even the low expectations that surround it. Overall EU relations with China are likely to remain chilly for the foreseeable future, and could yet go into a deep freeze during von der Leyen's second term as European Commission president. • Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.
