With the summit between China and the European Union (EU) just a day away, attention is focused on whether the two sides can find a compromise amid sharp tensions. In particular, rather than joining forces to counter the United States' "tariff bomb," both sides are continuing their disputes over tariffs on Chinese electric vehicles, European brandy, and restrictions on rare earth exports, raising concerns that the summit could end in failure.
According to China's Ministry of Foreign Affairs on the 23rd, António Costa, the chair of the EU summit, and Ursula von der Leyen, the President of the European Commission, will visit China on the 24th to meet with President Xi Jinping and hold the 25th China-EU meeting with Premier Li Qiang. Originally, the meeting was scheduled for two days, the 24th and 25th, but it has been reduced to one day, reportedly at the request of the Chinese side.
◇ Relay trade retaliation, sanctions against Russia… Conflicts pile up
This meeting will take place as China and the EU are revealing differences in their positions regarding trade, commerce, and other diplomatic matters. Both sides are continuing trade retaliation measures that encompass electric vehicles, brandy, medical devices, and rare earths.
The EU imposed a maximum anti-subsidy tariff of 45.3% on Chinese electric vehicles last year, and in response, China initiated an anti-dumping investigation into European brandy and imposed high tariffs. The EU has restricted public procurement bids for medical devices from Chinese corporations and tightened regulations on Chinese e-commerce platforms. In response, China has imposed sanctions on rare earth exports. According to the Financial Times (FT), the EU initiated anti-dumping investigations on more than 25 types of Chinese products last year, a figure that is four times higher than the year before.
Both sides claim that their actions are justified by violations of World Trade Organization (WTO) norms, but they continue to exchange criticisms without a clear resolution in sight. Commissioner von der Leyen criticized during last month's G7 summit, saying, "China intentionally distorts the market" and "there is no will to remain within the constraints of the international order."
Differences in positions surrounding the Ukraine war are also a major pillar of the conflict. The EU, which supports Ukraine, continues sanctions against Russia, which also include China. FT reported that Wang Yi, the Chinese foreign minister, recently stated that "China does not wish for Russia to lose in the Ukraine war." FT noted, "This statement comes amid China's strong assertion that it has not been involved in the Ukraine war for years" and added, "80% of dual-use items for Russia pass through China. This is a serious issue."
In response, the EU included two Chinese financial institutions and five corporations in the 18th sanctions package adopted on the 18th. The Chinese Ministry of Commerce strongly opposed this, calling it "groundless accusations" and warned of retaliation. Some foreign media predict that the adoption of a joint statement may even be uncertain.
◇ Whether the resumption of Chinese rare earth exports will lead to successful talks is uncertain
Notably, China has significantly increased rare earth exports to Europe ahead of the meeting. According to the Hong Kong South China Morning Post (SCMP), China exported 3,188 tons of rare earths last month, with 43% (1,364 tons) heading to the EU. This represents an 11 percentage point increase compared to the previous month (32%).
China's expansion of rare earth exports is interpreted as a conciliatory gesture toward the EU. The EU has expressed dissatisfaction with China's weaponization of rare earths, and there are speculations that by easing export restrictions, China is attempting to win back favor. Recently, the United States has raised new issues regarding China's purchase of Russian and Iranian oil, and if the EU also joins in, it could present significant challenges for China. The EU has previously shown strong reluctance against China's economic support by purchasing Russian oil.
However, within the EU, there are concerns that the long-standing conflicts run too deep, and regarding the resumption of rare earth exports, there remains skepticism that "China's unpredictable export regulations are unreliable," suggesting that China's conciliatory gesture may not lead directly to successful talks. Noah Barkin, a senior advisor on China at the Rhodium Group, told Reuters, "This meeting will be the latest example of numerous China-EU summits that have seen little success," adding, "This signals that the roots of the economic and security conflicts between the two countries have grown too deep to reconcile."