China bets on a low-cost reset with Europe + EU-China trade tensions

In this issue of MERICS Europe China 360°, we cover the following topics:

• China bets on a low-cost reset with Europe in Trump 2.0
• EU-China trade tensions are gearing for escalation
• Tracking Beijing's outreach to Europe
   

In the Trump 2.0 era, China bets on a low-cost reset with Europe

By Grzegorz Stec

China increasingly sees Europe as a politically divided and geopolitically challenged actor that can be leveraged for its market and used to gradually bring about a multipolar international order.  A gradual process would give China time to further strengthen its geopolitical position. Beijing is betting that pressure from Washington will send Europe into the arms of China to counterbalance transatlantic tensions.

In this view, robust, coordinated European de-risking efforts, which Beijing views as destabilizing the relationship, are set to subside, bringing improvement in relations at little cost to Beijing. It may be enough to offer ambiguous rhetorical support, targeted economic benefits and cooperation in salvaging some of the multilateral status quo that China deems useful for its agenda. 

Despite such views from Beijing, the lacking trust and persisting fundamental divergences of interests between China and Europe, even with Trump in the picture, mean there is a limit to any potential rapprochement.

China is yet to make an offer to Europe…

Several signals suggest Beijing is not eager to extend a major offer to Europe soon despite a diplomatic outreach. 

First, unlike the proactive steps China took ahead of Biden’s inauguration, most notably, a breakthrough in the Comprehensive Agreement on Investment, no similar offers have been made to the EU. Although China has had the opportunity to make a gesture, such as in consultations on EV price commitments launched in the context of the EU imposed tariffs on Chinese EVs, Beijing felt no urgency to offer Europe concessions ahead of Trump’s arrival to the White House.  

Second, the appointment of Lu Shaye as Special Envoy for Relations with Europe does not signal a conciliatory or cooperative tone or even care how the appointment is perceived in European capitals. Known for his controversial “wolf-warrior” style as China’s ambassador to France, Lu is likely to be used to communicate China’s demands and red lines in order to manage European positions.

Finally, China’s diplomatic outreach to Europe in the first weeks of Trump’s return did not signal major new proposals. 

Wang Yi’s vocal support for Europe’s involvement in peace negotiations for Ukraine at the Munich Security Conference was just a reiteration of China’s established stance that all relevant parties should be involved in the negotiations, although it stood in stark contrast with the disruptive comments of US Vice President JD Vance and Ukraine War envoy General Keith Kellogg. It is highly unlikely, however, that Beijing will back up its rhetoric by actively responding to Europe’s concerns, halting its support for Russia and lobbying for Ukraine’s position beyond rhetorics. Still, by leveraging the optics, Beijing may hope to limit Europe’s assertiveness toward China. The other parts of Wang Yi’s speech focused on the need for multipolarity and “true multilateralism,” also a long-held Chinese position now deployed to present Beijing as a responsible power.