Divides on trade and Ukraine in focus as EU and China’s leaders meet in Beijing

A top European Union official has told Chinese leader Xi Jinping that China and the EU must address both the imbalances in their trading relationship and Russian aggression against Ukraine.

The two are divided on both issues.

European Commission president Ursula von der Leyen, meeting Mr Xi in the Chinese capital Beijing, said they need to manage their differences responsibly.

“China is the EU’s most important trading partner,” Ms von der Leyen said in opening remarks posted on the commission’s website.

“But there are clear imbalances and differences that we must address.”

Mr Xi said that China and the EU should handle their differences through dialogue, and pushed back against what his government sees as a shift in European policy on China towards a more strident and competitive approach.

The two sides “should not regard each other as rivals because of different systems, reduce co-operation because of competition, and confront each other because of differences”, he said, according to state broadcaster CCTV.

The meeting comes a day after EU member Italy announced it was withdrawing from Mr Xi’s signature “Belt and Road” initiative that aims to build a global network of Chinese-financed roads, ports and power plants.

Italy became the first G7 country to sign on to the initiative in 2019, when the government at the time promoted it as a way of increasing trade with China while getting investments in major infrastructure projects.

Neither outcome materialised.

In the intervening years, Italy’s trade deficit with China has ballooned from 20 billion euros to 48 billion euros (£17 billion to £41 billion.)

Foreign Ministry spokesperson Wang Wenbin defended the initiative and appeared to imply that Italy had been influenced by forces hostile to China.

“China firmly opposes smearing and undermining co-operation in building the Belt and Road and opposes stoking bloc confrontation and divisions,” Mr Wang said at a daily briefing on Thursday.

Ms von der Leyen and Charles Michel, the president of the EU Council, met Mr Xi in the morning and were meeting China’s number two leader, Premier Li Qiang, later in the day.

Ms von der Leyen, as commission president, heads the day-to-day business of the EU, while Mr Michel chairs the summits of EU leaders.

The European Union is calling on China to improve market access for products from its 27 member countries to address an annual trade imbalance of more than 200 billion dollars (£159 billion).

China exported 458.5 billion dollars (£364.8 billion) worth of goods to the EU in the first 11 months of this year and imported 257.8 billion dollars (£205.1 billion), according to Chinese customs data released on Thursday.

The EU has angered China by launching an investigation into the latter’s subsidies for electric vehicles to determine whether they give manufacturers in China an unfair competitive advantage in European markets.

“China has never deliberately pursued a trade surplus,” Mr Wang said ahead of the summit.

He noted recent import and supply chain expos that he said encourage foreign companies to sell to the Chinese market of 1.4 billion people.

Mr Wang also took aim at possible EU restrictions on technology exports to China.

“I’m afraid it’s unreasonable if the EU imposes strict restrictions on the export of high-tech products to China while expecting a significant increase in exports to China,” he said.

The EU is looking for better market access for a range of products including cosmetics, infant formula, wine and other alcoholic beverages.

China has angered the EU by taking a neutral stance in what most European countries see as a Russian war of aggression against Ukraine.

The EU is calling on China to use its influence with Russia to end the invasion, ensure that exports from or via China are not aiding Russia’s war effort and support Ukrainian President Volodymyr Zelensky’s peace formula.

Ms von der Leyen said the EU and China have global responsibilities as major powers and a shared interest in peace and security.

“That is why it is essential to put an end to the Russian aggression against Ukraine and establish a just and lasting peace consistent with the UN Charter,” she said.

Mr Xi said China and the EU should promote political settlements of international hot-spot issues, according to CCTV, which did not include any specific mention of the wars in Ukraine or Gaza.