Trade, Espionage, and Alliances: The Stakes of Xi Jinping's Visit to Europe

When Chinese President Xi Jinping visited Italy in 2019, he received a grand welcome, highlighted by private tours of Roman landmarks and a dinner serenaded by opera star Andrea Bocelli.

by Faruk Imamovic
Trade, Espionage, and Alliances: The Stakes of Xi Jinping's Visit to Europe
© Getty Images/Kevin Frayer

When Chinese President Xi Jinping visited Italy in 2019, he received a grand welcome, highlighted by private tours of Roman landmarks and a dinner serenaded by opera star Andrea Bocelli. This visit was punctuated by Italy's decision to join the Belt and Road Initiative (BRI), marking a significant diplomatic victory for China. However, five years later, Xi's return to Europe paints a different picture, one characterized by growing skepticism and shifting alliances.

A Tense Backdrop

The landscape of European-Chinese relations has undergone significant transformation since Xi's last visit. In recent weeks, the European Union has initiated trade investigations targeting Chinese wind turbines and medical equipment, and has conducted raids on Chinese firms suspected of receiving unfair subsidies. Moreover, the arrest of individuals in Germany and the UK for alleged espionage activities linked to China underscores the growing concerns about Beijing's global ambitions and influence.

Perhaps the most symbolic shift occurred in March when Italy formally withdrew from the BRI, stripping the initiative of its sole G7 member. This decision reflects broader European anxieties about China's deepening ties with Russia amid the ongoing conflict in Ukraine.

Economic Grievances and Security Concerns

The European Union is bracing for what could be a major trade confrontation with China. Economic grievances, compounded by suspicions of China's geopolitical motives, have led to a hardened stance across several European capitals. According to Noah Barkin, a visiting senior fellow at the German Marshall Fund of the United States, while there is a consensus on the threat posed by China, Europe remains divided on the extent and speed of its response.

Xi's tour, which includes stops in France, Serbia, and Hungary, presents an opportunity for him to address these concerns directly. However, it also serves to highlight the divisions within Europe—divisions that might ultimately benefit China.

Trade Frictions and Diplomatic Maneuvers

The focal point of Xi's visit will be his meetings with European leaders, including European Commission President Ursula von der Leyen and French President Emmanuel Macron. Von der Leyen has been vocal about Europe's need to "derisk" its supply chains from China, especially in securing key technologies. She is also leading a high-stakes investigation into Chinese electric vehicle (EV) imports, which are suspected of benefiting from state subsidies.

China's response has been to emphasize the dangers of decoupling from its economy and to promote the role of Chinese EVs in global efforts to reduce fossil fuel use. This message was similarly conveyed to German Chancellor Olaf Scholz during his recent visit to Beijing, although it faced criticism for lacking substantial commitments.

Despite the tough rhetoric, Xi might find a more receptive audience in Macron, with whom he is expected to spend time in both Paris and the Pyrenees mountains. Macron's stance as an independent actor within the EU might offer Xi an opportunity to foster a closer relationship, potentially driving a wedge between Europe and North America.

Trade, Espionage, and Alliances: The Stakes of Xi Jinpings Visit to Europe
Trade, Espionage, and Alliances: The Stakes of Xi Jinpings Visit to Europe© Getty Images

A Strategic Approach in Eastern Europe

As tensions simmer in Western Europe, Xi’s itinerary includes less contentious stops in Serbia and Hungary, where he is likely to receive a much warmer reception. This strategic choice underscores Beijing's adeptness at navigating global politics, selecting destinations where criticism is muted and support for Chinese initiatives remains robust.

In Serbia, Xi’s visit coincides with the 25th anniversary of NATO’s accidental bombing of the Chinese embassy in Belgrade. This event is a poignant reminder of the historical grievances held by China against NATO and its influence in Europe. The commemoration could serve to strengthen Sino-Serbian ties, reinforcing the narrative of solidarity against perceived Western aggression. Furthermore, Serbia, a non-EU member described by Beijing as an “iron-clad” friend, continues to deepen its trade and investment links with China. Recent announcements of Chinese investments in renewable energy projects in Serbia underscore the strengthening bilateral relationship.

Hungary presents a similar opportunity for Xi. Under Prime Minister Viktor Orban, Hungary has often been at odds with the broader EU stance on various issues, including human rights. Orban’s increasingly authoritarian rule has made Hungary an essential ally for China within the EU, helping to mitigate European efforts that challenge Beijing on sensitive issues. Hungary also serves as a significant hub for Chinese automotive companies, including electric vehicle manufacturers, which helps China circumvent potential EU tariffs.

Bridging Divides or Deepening Rifts?

Xi’s approach during his European tour seems to be twofold: attempting to mend fences with his toughest critics in the West while solidifying alliances in Eastern Europe. The dual strategy not only aims to safeguard China’s economic interests but also seeks to exploit the existing divisions within Europe.

In Western Europe, the dialogue remains challenging, with significant pushback against China’s policies and practices. The meetings with leaders like Macron and Von der Leyen are pivotal, as they represent an attempt by Xi to soften the EU’s increasingly stringent stance towards China. These discussions are critical, especially in light of the EU's efforts to diversify away from Chinese supply chains and reduce dependency on Chinese technology and infrastructure.

Conversely, in Eastern Europe, the reception is expected to be less fraught. Xi’s engagements in Serbia and Hungary will likely highlight the economic benefits of partnering with China, contrasting sharply with the more confrontational tone observed in other parts of Europe. This divergence in reception could underscore the strategic, yet potentially divisive, nature of China’s engagement with different European factions.

Xi’s tour is unfolding against a backdrop of global shifts and regional recalibrations. The outcomes of this visit could influence Europe-China relations for years to come, potentially setting the stage for either a more collaborative or a more contentious interaction between the two powers.

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