Xi seeks to defuse China-EU tensions over trade imbalance
First in-person summit in years comes as Italy heads for Belt and Road exit
SHANGHAI -- Chinese President Xi Jinping met leaders of two top European Union institutions on Thursday, aiming to smooth over relations after Brussels warned that it has "tools" to correct a chronic trade imbalance.
The visit to Beijing by Ursula von der Leyen, president of the European Commission, and Charles Michel, head of the European Council, comes as China increasingly relies on European countries to absorb a glut of industrial output as its own economy slows. Amid growing discomfort in Europe over ties with China more generally, Italy is understood to have formally submitted a plan in recent days to withdraw from Beijing's Belt and Road Initiative.
"China and the EU should be partners for mutually beneficial cooperation," Chinese President Xi Jinping told the European leaders, according to China's state news agency Xinhua. He called for stepping up dialogue to strengthen trust.
The meeting marked the first in-person EU-China summit since 2019, according to the European Council. Before departing for Beijing, von der Leyen had set the tone by stressing, "We have tools to protect our market." Europe blames the trade gap partly on the difficulty its companies have in gaining access to the Chinese market.
China's trade surplus with the EU reached $201 billion in the first 11 months of this year, data released by the Chinese customs office showed on Thursday. The surplus has narrowed from last year amid global economic uncertainty, but it remains a huge gap and was expected to be a point of contention in Thursday's discussions.
China's Foreign Ministry pushed back before the meeting, saying a contributing factor is that a third of outbound shipments by EU companies in China go to Europe.
Beijing had already made known its displeasure with von der Leyen's call for European economies to diversify or de-risk away from China for security reasons, as well as a European anti-subsidy investigation on Chinese electric vehicle imports.
Yet Xi appeared to strike a conciliatory tone on Thursday, echoing his meeting with U.S. President Joe Biden last month.
Grzegorz Stec, an analyst at China-focused think tank Mercator Institute for China Studies (MERICS) in Berlin, said China intends to "double down" on bilateral relationships heading into a 2024 filled with uncertainty -- with elections scheduled in the U.S., the EU and Taiwan.
"It is quite likely that China is going to try to defuse de-risking through [bilateral] discussions with European capitals," said Stec. "This highlights the question of continuity of any EU position on China."
Italy, at least, has fallen in line. The only Group of Seven country to join the BRI has been largely disappointed with the results and appears to have calculated that the costs outweigh the benefits. But Rome has also acknowledged the continued importance of bilateral ties, with Prime Minister Giorgia Meloni stressing in September that a withdrawal "would not compromise relations with China."
Beyond trade, the EU leaders on Thursday were expected to caution China against circumventing sanctions imposed on Russia for its invasion of Ukraine, while urging Beijing to play a more active role in seeking peace in the Middle East.
Apart from establishing working groups to ease the trade frictions, EU officials and analysts said they did not expect substantial outcomes from the summit.
On Thursday, Xi told his EU guests to steer clear of "various kinds of interference" -- likely a reference to Europe's embrace of the U.S.-led de-risking agenda.
Analysts at risk advisory Eurasia Group doubted that any cracks would open up in U.S.-EU cooperation. While EU officials might signal more cooperation with Beijing, they wrote, "That, however, will be conditional on China addressing EU demands, particularly on the economy and Ukraine."