By Rui Lourido
China’s rapid economic recovery post-COVID has prevented a European recession. Recognizing this, European leaders are increasingly visiting China to deepen economic cooperation, even as the U.S. pushes anti-China policies.
China was the European Union’s largest partner in goods imports (20.5% of total imports) and the third-largest partner in goods exports (8.8% of total exports) in 2023, according to Eurostat data.
However, the anti-China rhetoric of the U.S., EU, and U.K. governments worsened in 2023 and early 2024 due to China’s neutrality in the Ukraine crisis and its condemnation of Israel’s actions in the Gaza Strip.
The European Commission and some European governments have been uncritically mimicking the U.S.’s anti-China rhetoric, which aims to neutralize China as a commercial and economic competitor through unilateral sanctions, violating World Trade Organization rules.
This strategic myopia of the European political elite in power goes against the interests of the business community and most European citizens, who desire a climate of peace and non-militarization of their economies and intend to remain optimistic and interested in increasing investments in their respective markets together with Chinese companies.
On the other hand, despite the strain caused by the U.S. economic and diplomatic war against China, the China-EU Comprehensive Strategic Partnership, established in 2003, has gained greater relevance in the current international context.
At the same time, China’s role in the supply chains of G7 economies has grown. For example, between 2018 and 2022, China’s share of total intermediate goods imports increased from 11.1% to 15.9% in Germany and from 10.3% to 15.1% in the U.K.
Germany takes the lead in revitalizing economic relations with China
Despite the complexities, there has been an increase in visits by important European political and business leaders to China. The most recent and significant visit took place in mid-April when German Chancellor Olaf Scholz, representative of the main European economy, visited China for three days, accompanied by major German exporters, such as BMW and Volkswagen. It was Scholz’s second visit to China (the first being in November 2022), making him the first European head of state to personally visit President Xi Jinping twice in two years.
As in the first visit, Scholz was here to focus on deepening economic relations with China. The German Chancellor visited industrial centers such as Chongqing, where he toured a factory of a German company dedicated to the production of sustainable hydrogen propellants, and financial centers such as Shanghai, where he also visited a German plastics company that works with green and sustainable technologies.
In Beijing, Scholz was accompanied by the minister of agriculture, Cem Özdemir; the minister of the environment, Steffi Lemke; and the minister of transport and digital media, Volker Wissing. They were received by President Xi and Prime Minister Li Qiang. Another German leader, Markus Soeder, minister-president of Bavaria, visited China on March 23 of this year.
In view of the EU’s “de-risking” orientation toward China, the Chinese Ministry of Foreign Affairs stated that President Xi told Chancellor Scholz: “Mutually beneficial cooperation between China and Germany is not a ‘risk,’ but the guarantee for a stable bilateral relationship and an opportunity for the future. There is huge potential to be tapped for pursuing win-win cooperation in both traditional sectors such as machinery and automobile, and new areas such as green transition, digitization and artificial intelligence.”
The Chinese president also said: “It is important for the two countries to stay vigilant against the rise of protectionism, adopt an objective and dialectical view on the issue of capacity through a market and global perspective…China is committed to the basic national policy of opening up, and hopes that the German side can provide a fair, transparent, open and non-discriminatory business environment for Chinese enterprises in Germany.”
The Chinese leader further stated that ties between China and Germany have an important impact on Eurasia and the entire world, so the two countries must develop their ties from a strategic and long-term perspective in order to inject more stability and certainty into the world.
Scholz stated that “Germany is willing to work with China to further strengthen bilateral relations, deepen dialogue and cooperation in various fields,” and that “Germany opposes protectionism and supports free trade. Germany is willing to strengthen communication and coordination with China to jointly respond to global challenges.”
The German car industry was a key focus of the negotiations. The extensive collaboration between Xiaopeng, a rising Chinese car maker, and Volkswagen showcases a growing agreement on the importance of electric mobility and the need for Chinese and European automakers to share the expanding electric vehicle (EV) market.
This cooperation is part of the long history of intense collaboration between Chinese and European car manufacturers. In today’s automotive industry, there are countless opportunities for mutual benefit. China’s expertise in production efficiency and market adaptation, combined with Europe’s tradition of engineering excellence and innovation, creates fertile ground for cooperation.
France is keen on expanding ties with China
As Germany has taken a more prominent role, France has aimed to assert its own geopolitical interests, expressing a desire for greater influence in Europe and on the international stage, especially given the drastic decline of France’s influence in Africa. In April 2023, French President Emmanuel Macron visited China and held talks with President Xi. On April 1, 2024, French Minister of Foreign Affairs Stephane Sejourne made a trip to China.
In response to these visits and the French invitation, President Xi paid a state visit to France from May 5 to 7.
During President Xi’s visit to the country, the two sides issued four joint statements on the situation in the Middle East, on AI and global governance, on biodiversity and oceans, and on agricultural exchanges and cooperation. And close to 20 bilateral cooperation documents were signed in such areas as green development, aviation, agrifood, commerce and people-to-people exchanges.
French President Macron told his Chinese guests that France would like to have closer economic ties and multilateral communication and collaboration with China, and work for more outcomes in the France-China strategic partnership. France hopes to export more agricultural products to China. At the same time, it will continue to open its market to China, and will not adopt discriminatory policies against Chinese companies. France welcomes investment and cooperation by more Chinese companies, including high-tech firms.
The example of European multinational Airbus is significant. It is building a larger factory in Tianjin, China, to assemble A320 aircraft. The factory is estimated to come into operation in 2025. The aviation industry is deeply integrated between China and Europe, encompassing everything from projects to the production and assembly of components, and from delivery to aircraft dismantling and recycling.
US interference
In response to the decline of its global hegemony, the U.S. has increased unilateralism on international trade in violation of WTO rules. It is also trying to revive the Cold War mentality, fueling conflicts and wars between old geopolitical blocs. The U.S. has disrupted supply chains for its allies and attempted, unsuccessfully, to isolate Russia and China. As Columbia University Professor Jeffrey Sachs points out, the so-called “Western world,” comprising no more than 12% of the global population, has provided uncritical, though not unconditional, support for the hegemony of the U.S., which accounts for around 4% of the world’s population, over other countries that make up 84% of the global population. Additionally, some nations clearly back the confrontation between blocs, such as NATO versus Russia, as well as the Israeli occupation, bombing, and starvation of the Palestinian people.
In other words, the U.S. has become a serious distraction or even hindrance in normal ties between China and the EU members.
Response from China and the EU
Faced with the current global turmoil, China has been actively and responsibly proposing several initiatives to the entire international community, not just the Global South. These proposals, including the concept of a global community of shared future, the Belt and Road Initiative (BRI), and the Global Development Initiative, aim to promote global economic development and stability.
While China and the EU do not share the same views on all matters and often have divergent approaches to issues, partly due to their distinct civilizations, historical trajectories, and cultural traditions, China has made effort to emphasize shared elements and values in its relationship with the EU, downplaying antagonistic factors. Despite their differences, China has actively sought to highlight commonalities and areas of alignment with the EU.
With a history spanning more than 5,000 years, China appreciates the rich histories and cultures of European nations. Both Chinese and European civilizations share values such as the pursuit of peace, the search for freedom and resistance to violence, the notion of mutual respect in human relationships and democracy, as well as the recognition of the importance of modernizing societies through education, economic development, and technological innovation.
These common values, together with the awareness of the need to work together to face today’s biggest challenges, create a stable and conducive basis for deepening the current China-EU Comprehensive Strategic Partnership, namely, in the urgent fight against climate change; in defense of multilateralism; in increasing democracy in international relations; in valuing the role of the United Nations; in maintaining world peace and stability; in combating international terrorism; and in promoting sustainable development and making efforts to eradicate poverty.
These common interests and values have created conditions for maintaining bridges and, whenever possible, increasing economic relations between China and European countries. According to Eurostat data, in 2023, the EU’s trade deficit with China stood at 291 billion euros, having reduced by more than a quarter compared with 2022. The most imported products from China by the EU are products with high incorporated value, resulting from accelerated Chinese modernization based on human resources training, innovation, and technological development.
According to statistics, the bilateral investment stock between China and the EU exceeded $250 billion at the end of 2023. EU investment in China in 2023 was $10.6 billion, marking a 5.5% increase and exceeding $10 billion for the second consecutive year. In the same period, China’s investment in the EU was $8.2 billion, an increase of 17.4%.
According to the 2023 Business Confidence Survey released by the European Union Chamber of Commerce in China, more than 90% of European companies surveyed plan to make China their investment destination, and 59% consider China one of their top three investment destinations.
A survey of 288 German companies in China conducted by the German Chamber of Commerce in China shows that 55% of these German companies plan to increase their investments in China in the next two years. Meanwhile, the 2023 Annual Report by the China Chamber of Commerce for the EU shows that more than 80% of Chinese companies surveyed plan to enhance their business in Europe.
Despite the West’s efforts to “stop” globalization, the world economy is interconnected and interdependent. China’s rapid economic recovery post-COVID has ensured that the world economy does not enter a recession. The lack of global development cooperation, not the rise of China, poses the greatest security risk.
The economies of China and the EU are complementary, and their economic relations are mutually beneficial. The West, particularly Europe, must view China as a partner rather than a threat and refrain from the effort to interrupt the rise of the Asian giant, as China’s economic growth is fundamental to Europe’s socioeconomic development.
European Commission President Ursula von der Leyen told Chinese President in Paris a few days ago that it is important that the EU maintains good relations with China, and the EU wishes to strengthen cooperation with China.
China’s openness is proven by its initiatives open to everyone’s participation, to promote peace and economic and social development, which allows stability and improved lives. President Xi’s state visits to several European countries, namely France, Serbia and Hungary, present an opportunity for Europeans. These visits are a good chance to strengthen bridges. Through dialogue, these engagements can contribute to building a global community of shared future.
Just as President Xi Jinping suggested during his visit to Hungary, China and the European countries should be committed to solidarity and collaboration, champion humanity’s common values, and practice true multilateralism. They should also advocate an equal and orderly multipolar world and a universally beneficial and inclusive economic globalization, and inject more positive energy into safeguarding world peace and promoting common development.
