Xi keen on consolidating bilateral ties to divide EU

Jayadeva Ranade

President, Centre for China Analysis and Strategy

CHINESE President Xi Jinping’s recent visit to France, Serbia and Hungary came amid rising concern in Europe about the war in Ukraine and China’s growing assistance to Russia. Commenting on Xi’s tour, the official Zhongguo Qingnian Bao (China Youth Daily, May 6) candidly observed that the visit was “vitally important for China’s relations with France, Serbia, Hungary and the European Union (EU) at large”.

High on Xi’s agenda were the economy, concern about the possibility of the West imposing sanctions on China, and the issue of ‘overcapacity’ flagged by US Treasury Secretary Janet Yellen and the EU. Xi’s tour was carefully crafted to first try and ‘soften’ France, which has a powerful voice in the EU and considerable investments in China, and then to end with a successful flourish in Serbia and Hungary — both countries with whom China has excellent commercial and diplomatic ties. Signed articles by Xi were published in major newspapers of the three countries, coinciding with his arrival.

France was the most difficult to deal with as President Macron has changed his views over the past year and now sees the war in Ukraine as an existential threat to Europe. This has increased worries about the supply by China of dual-use goods and military material to Russia. To demonstrate — especially after German Chancellor Olaf Scholz bent his knee to Beijing — that France and the EU were equally concerned about Ukraine, Macron invited EU President Ursula von der Leyen to join the talks with Xi in Paris. Contentious issues were raised, such as the French-backed anti-subsidy investigation into electric vehicles from China; Chinese overcapacity; Beijing’s indirect support to Russia’s war in Ukraine; and the explosion of the Nordic pipeline.

In their 80-minute bilateral talks, Macron reportedly raised concerns about China supplying dual-use items to Russia and underscored that the war in Ukraine posed a direct threat to Europe. Xi said that in this phase of transformation and turbulence, “China and France should uphold independence and jointly prevent a new Cold War or bloc confrontation” and “stay committed to the spirit that guided the establishment of their diplomatic ties, namely independence, mutual understanding, long-term vision and mutual benefit, and enrich it with new features of the new era”. He said they should take “a long view and work together for an equal and orderly multipolar world” and “and jointly oppose decoupling and cutting off of supply chains.” He offered to “deepen cooperation” in aerospace and aviation, nuclear energy, innovation and finance, and “expand cooperation in emerging areas such as green energy, smart manufacturing, biomedicine and artificial intelligence (AI)” as well as a reform of the international financial system.

Macron emphasised that France would not adopt discriminatory policies and did not want to keep China out of the French market. He said France hoped to export more agricultural products to China and was ready to enhance cooperation in areas such as aerospace and aviation, nuclear energy for civilian use, biodiversity protection and AI, and jointly uphold multilateralism, the UN Charter and international law.

After their 100-minute trilateral meeting, Von der Leyen said she had pressed Xi on all contentious points and urged him to rein in Chinese subsidies and manufacturing overcapacity and give European companies more access to the Chinese market. She said she was counting “on China to use all its influence on Russia to end its war of aggression against Ukraine”, and urged Beijing to stem the supply of dual-use goods helping Russia’s military. She pointed out that “given the existential nature of the threats stemming from this war for both Ukraine and Europe, this does affect the EU-China relations.”

Xi seemed to brush off these concerns and stressed that “China is not at the origin of this crisis, nor is it a participant”. He said the crisis should not be used to tarnish China’s image or start a new Cold War. Interestingly, throughout the meetings, Xi referred to the war in Ukraine as a ‘crisis’.

After a quick visit to the home of Macron’s grandmother in the Hautes-Pyrénées, Xi arrived in Serbia on the 25th anniversary of the bombing of the Chinese Embassy in Belgrade on May 7 to a red-carpet welcome. Xi received a similar reception in Hungary. China signed 28 and 18 agreements, respectively, in Belgrade and Budapest.

In Serbia, which is not a member of the EU, Xi made it clear that the country stood to gain far more from close ties with China than the EU. The trans-Serbia Railway was highlighted as an example of the Belt and Road cooperation and they agreed to build a “China-Serbia community with a shared future in the new era”. Three more Confucius Centres and a Chinese Cultural Centre were opened. In Hungary, agreements were signed for two new electric vehicle-manufacturing factories.

At the joint press conference on May 9, Hungarian Prime Minister Viktor Orban announced that “China is one of the pillars of the new world order” and that Hungary would support China’s peace plan for Ukraine. Xi said: “China supports Hungary in playing a bigger role in the EU and promoting greater progress in China-EU relations.”

Beijing has for decades been trying to widen differences between the US and the EU to loosen American restrictions on the sale of technology and weaponry to China. Xi is consolidating relations with Serbia and Hungary to build them into potential wedges to divide the EU. Following Scholz’s visit in April, Beijing could see Germany as a potential weak link. The apparent change in French President Macron’s views on Russia could, however, impact China-France ties.

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