In a high-stakes Summit, EU President Michel and President von der Leyen met with Chinese President Xi Jinping to discuss a range of issues, including trade imbalances, the Ukraine conflict, and China’s position on Russia. The summit highlighted the growing complexities of the EU-China relationship, revealing both areas of convergence and deep-seated disagreements. EU leaders, not ones to mince words, brought to light concerns about market access and Beijing’s favoritism towards its domestic companies. China vehemently denied allegations of overcapacity in its electric vehicle sector while cautioning the EU against donning the protectionist hat.
This Summit marked a significant occasion for dialogue, building upon a phase of heightened bilateral engagements and dialogues. A series of high-level visits and discussions covering strategic and foreign policy matters, human rights, trade and economy, climate and environment, and digital issues set the stage for the Summit. These interactions underscored the EU’s steadfast commitment to meaningful engagement with China.
While recognizing the progress achieved through these discussions, the EU emphasised the imperative for tangible and concrete advancements, solidifying the commitment to substantive outcomes in the areas addressed.
President of the European Council, Charles Michel called for a “balanced, reciprocal, and mutually beneficial” trade relationship and stated that the EU will “engage with China based on transparency, predictability, and reciprocity.” He also urged China, as a permanent member of the UNSC, to protect the UN charter and notably the sovereignty and territorial integrity of all countries.
The summit highlighted the growing complexities of the EU-China relationship, revealing both areas of convergence and deep-seated disagreements. EU leaders brought to light concerns about market access and Beijing’s favoritism towards its domestic companies. China vehemently denied allegations of overcapacity in its electric vehicle sector while cautioning the EU against donning the protectionist hat.
Trade Imbalances and Unfair Competition
The EU and China maintain a substantial economic partnership, with a daily goods trade valued at €2.3 billion. The EU expressed concerns over China’s substantial trade surplus with the bloc, amounting to over €400 billion in 2022. President Michel warned Xi that the EU would not tolerate unfair competition, calling for greater market access and transparency for European companies.
Despite this, the EU is committed to maintaining an open and outward-looking approach rather than opting for decoupling. Expressing concerns, the EU highlighted the presence of underlying distortions and the adverse impacts of manufacturing overcapacity within China’s economy. China countered with assurances that the trade surplus would gradually shrink, but did not commit to substantive changes in its trade practices.
Emphasising the importance of a more balanced economic relationship marked by a level playing field and reciprocity, the EU urged China to address these issues. The EU also underscored the necessity of making progress on long-standing demands, such as ensuring transparency in the business environment, establishing predictable supply chains, addressing trade distortions including industrial subsidies, and eliminating sector-specific trade barriers.
The EU expects tangible actions from China to enhance market access and improve the investment environment for European investors and exporters. Clarifying that de-risking is the objective, not decoupling, the EU aims to strengthen resilience by addressing critical dependencies in specific sectors, all while adhering to World Trade Organization rules.
Both the EU and China share a common interest in a robust, multilateral, rules-based trading system capable of addressing contemporary challenges. The EU emphasised the joint responsibility to foster a transparent and competitive environment for the digital economy, promoting a level playing field for artificial intelligence that respects human rights and fundamental freedoms. Both parties are committed to avoiding the fragmentation of standards for information and communication technologies.
Acknowledging recent agreements, including the establishment of working groups on financial regulation, cosmetics, export controls, and wines and spirits, the EU looks forward to activating mechanisms that facilitate cross-border data flows. Progress has been noted in areas such as customs, intellectual property rights, food safety, safety of products sold online, and geographical indications. The leaders mutually agreed to relaunch the High-Level People-to-People Dialogue in 2024.
The Ukraine Conflict
The looming presence of the Ukraine conflict cast a shadow over the summit, with EU leaders seeking to press China to condemn Russia’s actions and leverage its influence to bring an end to the hostilities. However, President Xi remained noncommittal, reiterating China’s stance of treading cautiously and refraining from criticising Russia. The EU’s frustration was evident, with President Michel warning Xi and directing his attention to a list of companies suspected of supplying Russia with dual-use goods.
The EU’s hope lies in persuading China to cease its support for Russia in Ukraine, or at the very least, to restrict exports of dual-use goods that can be utilised for military purposes. However, it is unrealistic to expect Beijing to comply. While Europeans no longer entertain the notion of China pressuring Putin to halt the war, they still anticipate China’s cooperation in curbing the circumvention of EU sanctions.
The EU emphatically restated that, given its status as a permanent member of the UN Security Council, China bears a unique responsibility in safeguarding the fundamental principles outlined in the UN Charter, notably those pertaining to territorial integrity and sovereignty.
In light of the ongoing conflict, the EU appealed to China to leverage its considerable influence over Russia, urging them to cease their aggressive military actions. Furthermore, the EU strongly encouraged China to actively participate in Ukraine’s Peace Formula, emphasising the importance of diplomatic resolutions.
In a firm stance, the EU underscored the critical need for China to abstain from providing any form of lethal weaponry to Russia. Additionally, the EU called upon China to proactively prevent Russia from attempting to evade or undermine the effectiveness of imposed sanctions. The EU firmly believes that China, as a key global player, has a pivotal role to play in promoting peace, stability, and adherence to international norms in the face of the current crisis.
Regarding the situation in the Middle East, the EU vehemently condemned the indiscriminate and brutal terrorist attacks perpetrated by Hamas against Israel. The EU reiterated its support for Israel’s right to self-defense in accordance with international humanitarian law. Both parties acknowledged the utmost importance of safeguarding the well-being of all civilians, addressing the dire humanitarian conditions in Gaza, and actively implementing UN Security Council Resolution 2712.
Furthermore, the EU and China jointly affirmed their unwavering commitment to the two-state solution, emphasising the need for a peaceful and sustainable resolution to the Israeli-Palestinian conflict.
Leaders expressed satisfaction with the ongoing collaboration on climate change and environmental initiatives, citing a recent agreement to deepen cooperation on emissions trading and the circular economy. Recognising their status as major economies, both the EU and China acknowledged their pivotal roles in leading global endeavors to curtail greenhouse gas emissions, particularly within the ongoing COP28 discussions.
The EU applauded recent advancements in expanding renewable energy and China’s commitment to addressing methane emissions. Emphasising the collective and urgent responsibility of all nations to elevate climate ambitions, the EU urged China to align with global efforts, including endorsing the commitment to triple renewable energy capacity and double the rate of energy efficiency improvements by 2030, as well as supporting the Global Methane Pledge.
Beyond climate-related matters, leaders engaged in discussions covering various critical issues, including debt sustainability, food security, health and pandemic preparedness, biodiversity, water management, ocean governance, plastic pollution, and deforestation. These dialogues underscored the multifaceted nature of global challenges and the necessity for concerted efforts to address them effectively.
Divergent Perspectives on Global Order
The summit also served as a platform for showcasing the growing divergence in the EU and China’s worldviews. The EU, aligned itself with the US-led approach, emphasised the need for a rules-based international order, while China’s call for “trust” and “cooperation” stood in stark contrast to the EU’s focus on risk mitigation and decoupling.
Mixed Signals and a Lack of Concrete Agreements
Despite the apparent agreement on the need for a more balanced trade relationship, the summit failed to produce any concrete agreements. The EU and China remain at odds on a range of issues, including human rights, Taiwan, and the South China Sea. The summit’s outcome reflected the challenges of navigating a relationship marked by both interdependence and substantial differences.
President Michel voiced apprehension about escalating tensions in the Taiwan Strait and the South China Sea, expressing hope that China comprehends the gravity of the situation. The EU expressed opposition to any attempts to change the status quo in Taiwan and the South China Sea. The EU leaders also raised concerns about flashpoints like Taiwan and the South China Sea, reiterating that “we are opposed to any unilateral attempt to change the status quo by force or coercion” .
The draft agenda contained no mention of prickly matters like Taiwan or human rights, but EU leaders raised both. EU-China differences on trade balance seem more concrete and pragmatic, unlike Taiwan question and South China Sea issue, which are irrelevant to Europe, as well as other broadly politicised and securitised concerns.
The EU heightened that instability in the East and South China Seas threatens regional and global prosperity and security. The EU will oppose any unilateral attempts to change the status quo by force or coercion. Disputes must be resolved through peaceful means in accordance with international law, in particular the United Nations Convention on the Law of the Sea (UNCLOS). Leaders further discussed the situation on the Korean Peninsula, in Afghanistan, Myanmar, and Iran.
China sought to portray itself as a reliable partner, emphasising its role in global stability. President Xi urged Europe to “steer clear of various kinds of interference,” likely alluding to the US-led de-risking agenda. The EU, while acknowledging the importance of the relationship, maintained its stance of vigilance, particularly regarding China’s actions in Xinjiang and Hong Kong.
Seeking to dispel any notions of a ‘de-coupling’ drama, von der Leyen clarified that Europe’s objective is to ‘de-risk’ lopsided ties. She underscored the importance of perceiving China beyond mere trade partnership – as a technological rival, military powerhouse, and a global actor with distinctive perspectives on the global order.
Xi, playing his cards strategically, appealed for “trust” to postpone the EU’s risk reduction plans, offering Beijing as a priority partner in scientific, technological, and industrial cooperation. While extending an olive branch for global stability, Xi cautioned against veering into the territory of confrontation. Von der Leyen, in a somewhat paradoxical twist, highlighted “coinciding interests” in climate policy and AI cooperation. Describing the summit as a “summit of choices,” she astutely observed a burgeoning list of differences without concrete agreements.
The situation, as described by some, resembled a “dialogue of the deaf,” where no breakthrough appears imminent. Neither side seems willing to yield ground on the contentious issues of trade balance or the ongoing war in Ukraine.
The EU restated its profound concerns regarding the human rights situation in China, with a particular focus on systemic human rights violations observed in Xinjiang and Tibet, instances of forced labor, the treatment of human rights defenders, and individuals from minority groups. The EU also expressed apprehension about the sustained erosion of fundamental freedoms in Hong Kong, emphasising the importance of China honoring its previous commitments in this regard.
Acknowledging the resumption of the Human Rights Dialogue in February 2023, the EU welcomed this development while underscoring its anticipation for the subsequent dialogue, scheduled to occur in China in 2024. This reaffirms the EU’s commitment to an ongoing and constructive engagement on human rights issues, seeking meaningful progress and addressing the outlined concerns.
The Road Ahead
The EU-China relationship is likely to remain complex and challenging in the years to come. The two sides will need to find ways to manage their differences while also finding common ground on issues of mutual interest. The EU-China summit underscored the need for open and frank dialogue, as well as a willingness to compromise on both sides. It highlighted the delicate balance between interdependence and competition that characterises the relationship between the two economic superpowers. The summit’s outcome suggests that a fundamental shift in the relationship is unlikely in the near future. Instead, both sides will need to navigate a path of cautious cooperation and wary competition, while striving to address the underlying issues that divide them.
 Press Release of the Summit available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_6431