Relations ahead of the 24th EU-China summit

Written by Ulrich Jochheim.

On 7 and 8 December 2023, the Presidents of the European Council, Charles Michel, and European Commission, Ursula von der Leyen, will participate in the 24th EU-China Summit in Beijing. This summit follows several visits to China by members of the Commission, and the adoption of important conclusions by the European Council on 30 June 2023. Probable topics on the summit agenda include bilateral relations, Russia’s war of aggression against Ukraine, the situation in the Middle East, climate change, global health, and pandemic preparedness.

Background: EU-China relations under the von der Leyen Commission

In March 2019, in a joint communication to the Parliament, European Council and Council, the Commission and the High Representative defined China as a partner, a competitor and a systemic rival. Since then, the EU has adopted a number of measures to improve its economic security and to ensure a level playing-field, including with China. These measures include the foreign investment screening mechanism, the Foreign Subsidies Regulation, the international procurement instrument and the anti-coercion instrument.

Trade volumes are a key variable in bilateral relations. In 2022, China was the third largest partner for EU exports of goods (9.0 %) and the largest partner for EU imports of goods (20.8 %). In the years from 2018 to 2022, the EU’s bilateral trade deficit with China rose from €154.7 billion to €396 billion, driven primarily by a strong rise in EU imports (+83 %) from China. Customs data also show that Chinese electric vehicle (EV) imports into the EU in the first 7 months of 2023 increased by 112 % year on year, and by 361 % from 2021. Since 2022, China’s ambiguous position on Russia’s war on Ukraine, combined with a rising bilateral trade deficit, has led the EU to place more emphasis on China’s role as competitor and systemic rival.

Following the confirmation of his third mandate as General Secretary of the Chinese Communist Party in October 2022, Xi Jinping has received a number of visitors both from EU Member States and from EU institutions: The November 2022 visit by German Chancellor Olaf Scholz was followed by a visit by Charles Michel in December 2022. A joint visit to Beijing by Ursula von der Leyen and French President Emmanuel Macron in early April gained considerable media attention because of the perceived difference in treatment of the two leaders under Chinese protocol.

Recent developments

In her 2023 speech on the state of the Union, von der Leyen insisted that competition must be fair, and mentioned the EV sector, where there are huge subsidies in China. She then announced that the Commission would be launching an anti-subsidy investigation into EVs coming from China. On 18 September, Commission Vice-President Vera Jourová co-chaired the 2nd EU-China High-Level Digital Dialogue in Beijing, which also touched on the difficulties faced by EU companies in China wishing to make use of their industrial data. Jourová also stressed her concern about China’s involvement in disinformation efforts and cyber-attacks linked to Russia’s war on Ukraine. On 25 September, Commission Executive Vice-President Valdis Dombrovskis co-chaired the 10th EU-China High-Level Economic and Trade Dialogue, together with China’s Vice-Premier He Lifeng, member of the Politburo of the Chinese Communist Party. During the meeting, Dombrovskis reiterated the EU’s serious concerns about the business environment for EU exporters and investors in China, and raised the issue of market access for European businesses. On the same day, Commissioner Virginijus Sinkevičius co-chaired the second meeting of the EU-China Water Policy Dialogue, where both sides stressed the successful EU-China cooperation during the UN 2023 Water Conference in March. During a November visit to China, Commissioner Thierry Breton criticised Beijing’s tough line on access to its vast telecoms market, noting that European 5G network equipment providers’ share had fallen to single digits. He said it was ‘not acceptable that Ericsson and Nokia would be excluded on unclear criteria’ from bidding for 5G contracts in China.

During the 12th EU-China Strategic Dialogue with China’s top diplomat Wang Yi on 13 October, High Representative Josep Borrell stressed the need for China to continue to refrain from supplying Russia with weapons and priority battlefield items, and underlined the negative impact of Russia’s war on global food security. Discussions also touched on the conflict in the Middle East, with Borrell condemning ‘all attacks against civilians … [and] recalling the parties’ obligations under international humanitarian law to allow unimpeded access to water, food, and medicines’. Borrell and Wang agreed on the urgent need to work towards de-escalation and on the two-state solution being the only way forward.

De-risking not decoupling

At their meeting on 30 June 2023, EU Heads of State or Government agreed on a common line on China. Their conclusions spell out the EU’s continued commitment to its multifaceted approach, as defined in 2019, and mention as areas for cooperation: climate change and biodiversity; health and pandemic preparedness; food security; disaster reduction; debt relief; and humanitarian assistance. Regarding trade issues, the conclusions insist on a level playing-field for EU businesses. The leaders confirmed that the EU wants to reduce critical dependencies and vulnerabilities, in an effort to de-risk, but not decouple. They also called on China to press Russia to end its aggression in Ukraine and withdraw its troops. The conclusions also emphasise the strategic importance of the East China Sea, the South China Sea and developments in the Taiwan Strait. Lastly, the leaders expressed concerns regarding China’s violations of human rights, in particular in Tibet and Xinjiang, and asked China to uphold its commitments towards Hong Kong.

On 16 November, von der Leyen delivered a speech on EU policy towards China in which she stressed that achieving a level playing field for EU businesses compared with their Chinese competitors was central to the EU’s relationship with China. In this context she expressed her expectation that China would address ‘current imbalances’ – an obvious reference to the EU’s near €400 billion trade deficit with China in 2022. She insisted that China – faced with ongoing weak private consumption – is subsidising its companies and then exporting the resulting overcapacity. Von der Leyen also emphasised that the EU wanted to de-risk and not to decouple, and alluded to possible EU-China cooperation on global challenges, referring in particular to the fight against climate change. Formidable challenges in this area are China’s strong opposition to the EU’s carbon border adjustment mechanism – as evidenced in the run-up to COP28 – and its much higher per capita emissions compared with the EU. On top of the strategic challenges in east Asia mentioned in the European Council’s 30 June conclusions, von der Leyen referred to the situation in the Middle East, and insisted ‘that every measure of influence Beijing has needs to be used to avoid further escalation’. Focusing on developments in Ukraine, von der Leyen emphasised that the EU ‘will keep engaging with Beijing so that its support for Russia remains as limited as possible’. She went on to state that ‘we must make clear that the way China positions on Russia will define our relationship for the years to come’. Along similar lines, in an interview on 13 November, Michel named economic security and China-Russia relations as key issues for the EU. This echoed the line he took in his meeting with Chinese Premier Li Qiang on the margins of the G20 summit in September 2023.

The official agenda for the upcoming summit in Beijing includes the following issues as topics for discussion: EU-China relations, including economic and trade; Russia’s war of aggression against Ukraine; the situation in the Middle East; climate change; global health and pandemic preparedness. Against the aforementioned background, experts, including former European External Action Service (EEAS) Director Gunnar Wiegand, do not expect the summit to result in major progress on bilateral EU-China relations.

European Parliament

On 16 November 2023, in the run-up to the summit, Parliament’s Committee on Foreign Affairs (AFET) adopted a report and draft recommendation on EU-China relations. Parliament is expected to vote on the report during the December plenary session. The report reaffirms earlier resolutions critical of China’s human rights record, in particular in Tibet, Xinjiang and Hong Kong, and its behaviour in its immediate surroundings, including in the Taiwan Strait. The report stresses China’s responsibility, as a member of the UN Security Council, not to circumvent sanctions against Russia, to pressure Russia to stop its war against Ukraine and to commit to peak CO₂ emissions before 2030. The draft calls for a UN investigation into human rights violations in China. It also calls for Taiwan’s participation in certain international organisations; inclusion of Members of the European Parliament in the EU-China Human Rights Dialogue; EU Member States’ suspension of their extradition treaties with China and Hong Kong; and the de-risking of trade flows. The report also calls for an EEAS ‘Far-East StratCom Task Force’ to fight disinformation originating in China.

Read this ‘at a glance’ note on ‘Relations ahead of the 24th EU-China summit‘ in the Think Tank pages of the European Parliament.