EU-China Summit Highlights Trade Tensions and Geopolitical Issues

A summit held in Beijing on July 24, 2024, between the European Union and China exposed significant tensions over trade imbalances and geopolitical issues. Chinese President Xi Jinping called for closer ties, while European Commission President Ursula von der Leyen highlighted the substantial $359 billion trade surplus that China holds with the EU. The meeting marked 50 years of diplomatic relations and came at a time of rising geopolitical frictions, prompting both sides to reassess their partnership.

During the summit, Xi stated that the current geopolitical climate necessitates a stronger collaboration between the EU and China. He emphasized, “The more severe and complex the international situation is, the more China and the EU should strengthen communication, enhance mutual trust, and deepen cooperation.” He also noted that the challenges Europe faces do not originate from China and urged the EU to maintain an open market without imposing trade measures like tariffs.

Von der Leyen responded firmly, indicating that the relationship had reached a critical juncture. She stressed the need to address the trade imbalance, stating, “We have reached an inflection point. Rebalancing our bilateral relations is essential. Because to be sustainable, relations need to be mutually beneficial.” Von der Leyen’s remarks underscore the growing concerns within Europe regarding unfair trade practices and the necessity for both parties to recognize and address their respective concerns.

Trade tensions between the EU and China have intensified recently. The EU has accused China of providing unfair subsidies, which led to increased tariffs on Chinese electric vehicles. In retaliation, China has launched anti-dumping investigations into imports of European products, including brandy, pork, and dairy. Furthermore, China has restricted government purchasing of EU-made medical devices as a countermeasure against perceived hurdles for Chinese suppliers in EU markets.

As of 2024, Chinese exports to the EU reached $609.4 billion, while EU exports to China amounted to $250.4 billion. Official Chinese data indicate that the goods-trade surplus rose by 21% in the first half of this year compared to the same period in 2023. This growing imbalance has strained relations, leading to a deterioration in the rapprochement once hoped for by Beijing.

The summit, originally scheduled to extend over two days, was limited to a single day due to the escalating grievances between the two trading blocs. In meetings with Xi and Chinese Premier Li Qiang, von der Leyen and Antonio Costa, President of the European Council, addressed not only trade issues but also China’s involvement in the ongoing conflict in Ukraine. Costa urged Xi to leverage China’s influence to encourage Russia to cease hostilities.

In addition to trade and Ukraine, discussions touched on China’s export controls concerning rare earth minerals, where China holds significant global reserves. Von der Leyen has previously criticized China for allegedly using its dominance in rare earths as a strategic weapon against competitors in key industries.

Despite the tensions, both sides managed to find common ground on climate issues. They issued a joint communique committing to “demonstrate leadership together” and to develop proposals aimed at combating emissions contributing to global warming ahead of the upcoming COP, the U.N. Climate Change Conference, scheduled for November in Brazil.

The summit highlighted the complexities of the EU-China relationship as both sides navigate a landscape marked by competition and cooperation. As they move forward, addressing the trade imbalance and geopolitical concerns will be crucial for maintaining a sustainable partnership.