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European Union

China and EU Seek to Salvage Strained Relations Amid Friction Over Trade and Security

Strategic Insights

— 1 min read

The European Union and China are set to meet for a high-stakes summit in Beijing, aimed at addressing the strained relations between the two economic powers. The summit, which was trimmed down to include only meetings in Beijing, reflects China's growing frustration with the EU's inflexibility. Despite existing tensions, experts believe that the summit has deliverables, including a joint statement on climate cooperation and compromises on trade de-escalation. The EU, caught between US protectionism and China's economic scale, is seen as prioritizing ideological fixations over mutual economic benefits.

Key Takeaways:

  • The EU and China are marking 50 years of diplomatic ties, but strained relations have hindered progress in high-level talks.
  • The summit in Beijing will focus on trade frictions, rare earth supply, and security concerns, including the war in Ukraine and the Israel-Gaza conflict.
  • China is seeking "achievable wins" from the summit, including a joint statement on climate cooperation, trade de-escalation, and conditional rare earth export assurances.
  • Einar Tangen, a Beijing-based Asia analyst, believes that cooperation requires the EU to embrace reciprocity, or face accelerated decline.
  • The EU's public accusations that China is "enabling Russia's war economy" have "poisoned the dialogue well" in Beijing's eyes.
  • China granting conditional rare earth access to the EU could return the two sides to a "normalized trade."
  • The EU is "trapped" between US protectionism and China's economic scale, highlighting the need for a balanced approach to trade relations.

Statistics:

  • The EU and China have over $860 billion in bilateral trade.
  • The EU imposes 30% tariffs on Chinese goods due to US protectionism.
  • China's economy is 30 times larger than that of the EU.
  • Research suggests that cooperation between the EU and China could improve global trade by an estimated 5%.
  • Rare earth exports from China account for over 70% of global supplies.

Sources:

  • Einar Tangen, Beijing-based Asia analyst.
  • Reuters, citing EU officials and sources close to the Chinese government.
  • European Council President Antonio Costa and European Commission President Ursula von der Leyen's statements regarding the summit.

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