President Xi Jinping’s Continental tour, his second in five years, has shown how many EU member states, at least those in the base of Europe, need a real test.
Xi chose to travel to his most fervent Western allies, Serbia and Hungary, as well as his long-awaited neighbors beyond France.
Xi targeted President Emmanuel Macron with a significant amount of attention because he has just criticized Russia’s war in Ukraine and supports the EU’s proper independence and financial security plans. These final two efforts are primarily focused on China.
On the original, China’s established markets with Russia are at a record high. China has consistently abstained from UN resolutions that condemn Russia’s anger against Ukraine.
In addition to offering attractive cut-rate charges, China also offers economic and financial aid for Russia, such as its exports of Russian oil and gas. ( India has also consumed Russian energy that is approved by the West. )
Most important of all, China is officially Russia’s main external vendor of everything, from trucks to cards to drones.
As US Secretary of State Antony Blinken warned during his recent journey to Beijing, for Chinese imports run the risk of being actually classified as “dual-use” or plainly defined as weapons.
Macron warned Xi in a similar way. Just three Chinese firms that have been fined by the EU for supplying dual-use systems to Russia so far, compared to a much longer list of US companies.
When he met Xi at the Elysée, Macron met with European Commission President Ursula von der Leyen by his side regarding EU financial security. She reportedly addressed every aspect of China’s economic model, not the least of which is its large industrial policy that has resulted in excessive capacity.
After years of fruitless attempts, EU officials appear to have changed their focus from facilitating market access for EU businesses to preventing overcapacity in China.
Xi’s response: The EU does not anticipate any pleasing measures because China simply has a sizable advantage in terms of comparative advantage brought on by innovations and economies of scale.  ,
Macron, however, believes that having Chinese EV producers produce in Europe, which Xi sounded to be in favor of on behalf of Taiwanese businesses, as do many different European leaders.
The agreement is certainly spruced up by the fact that the most recent Chinese EV plant in Spain will come with EU subsidies. However, where the value added will be generated ( since 40 % of EVs ‘ batteries are mostly produced in China ) will need to be questioned.
Notably, China can establish factories in the EU to avoid the anti-subvention duties that would apply to imported Taiwanese EVs if the EU’s continuing anti-subvention investigation so desires.  ,
Macron and Von der Leyen’s European tour will include even more telling stops in Serbia and Hungary during the next leg of Xi’s Western trip. More can be anticipated when Xi meets Hungarian Prime Minister Viktor Orban, who is friendly with China, at the 25th anniversary of NATO’s attack of the Chinese Embassy in Belgrade.
There is no way Macron may have resolved his meeting or warned Xi, and China’s support for Russia will certainly proceed. Judging by Xi’s opinions, the same is true for what the Union sees as China’s business overcapacity.  ,
Macron’s fact check will likely come from Von der Leyen’s final” I told you so,” but for the time being, Xi’s journey has failed to quell the chorus of concerns about China’s risk.
The EU is in a distinct attach as it eagerly awaits the outcome of the November election between Joe Biden and Donald Trump.  ,
Bruegel’s senior research fellow and Natixis ‘ chief economist for Asia Pacific, Alicia Garca-Herrero.