OPINION – China–EU: starting the long process of mending relations?

By José Luís de Sales Marques

Economist

1. What happened in Beijing

China and EU leaders met in Beijing to celebrate the 50th anniversary of EU–China diplomatic relations, address current challenges and explore future directions for a relation that is crucial to the world.

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The 50th anniversary was signalled in a meeting hosted by President Xi Jinping for the EU delegation headed by António Costa and Ursula von der Leyen, respectively presidents of the European Council and the European Commission. The High Representative for Foreign Affairs and Vice-President of the EU Commission Kaja Kallas was also in attendance. After the meeting, Chinese Premier Li Qiang, Costa and von der Leyen jointly chaired the 25th China–EU Summit.

As far as public diplomacy goes, the picture of a smiling Xi holding hands with Costa on one side and von der Leyen on the other at the Great Hall of the People seems reassuring the world that the relationship is to stand strong well into the next fifty years, giving hope amid a climate of tense relations.

According to official sources and international media, China and EU leaders exchanged remarks on several bilateral issues, details of which have been selectively revealed on separate press releases, since there was no final communiqué. However, both parties agreed on an important joint declaration on climate change, the only public demonstration of an ongoing partnership sailing through rather rough waters.

At the celebratory meeting President Xi called on China and the EU to provide more stability and certainty for the world through steady and sound China–EU relations, reaffirmed China’s views that the current challenges facing the EU do not come from China and there are no fundamental conflicts of interest or geopolitical contradictions between China and the EU. Xi also reminded EU leaders that China always regarded the bloc as an important pole in a multipolar world and consistently supported European integration and the strategic autonomy of the EU.

As the way for the future, the Chinese leader called both sides to position the relations as partnership, uphold openness and cooperation, properly manage differences and practise multilateralism and defend international rules and order, as the way for the future. Moreover, Xi offered a long-term and strategic reasoning to those relations, urging Chinese and EU leaders to once again demonstrate vision and leadership, and make the right strategic choices that will meet people’s expectation and stand the scrutiny of history.

Xi’s message also touched on some contentious issues, calling on the EU to remain open in trade and investment markets, refrain from using restrictive economic and trade tools and foster a sound business environment for Chinese enterprises investing and operating in the EU, without naming the ongoing “de-risking” from China strategy which is being implemented at the Union.

António Costa, in accordance with his role as president of the Council, addressed his Chinese counterpart remembering past achievements and current commonalities as well as differences between the two sides, leaving the sensitive issue of the war in Ukraine and China–Russia relations towards the end of his speech. While remembering the 80th anniversary of the UN Charter, he “call on China to use its influence on Russia to respect the UN Charter and to bring an end to its war of aggression against Ukraine” (consilium.europe.eu, 2025-07-24).

Costa’s diplomatic approach contrasted with the assertiveness of Ursula von der Leyen’s as she introduced some of the hottest EU’s grievances towards China, namely rebalancing trade, securing stable supply of rare earth and magnets to European industry and addressing the issue of Chinese industrial subsidies. For instance, in referring to the trade deficit of over 300 billion euros EU had with China in 2024, she said that EU–China relations have reached an “inflection point”. The bloc insists that China further opens its market to European goods and services by offering a similar degree of access that the EU gives to Chinese goods entering the single market. However, her most contentious remark must have been that China’s ties with Russia were the “determining factor in its relation with the EU” (BBC, 2024/07/24).

Premier Li Qiang, co-chair of the 25th China–EU Summit, took the occasion to announce an “upgraded version” of the China–EU export control dialogue to ensure the stability of industrial and supply chains between China and Europe. An improved dialogue and coordination over the mechanism, which includes Chinese exports of rare earth and magnets from China to Europe, a crucial element for European car makers, can be seen as a takeaway from this summit.

However, the only joint EU–China statement coming out from the summit was on climate. With the title “The way forward after the 10th anniversary of the adoption of the Paris Agreement”, the document emphasises China–EU partnership and its commitment to multilateralism and the Paris Agreement with a pledge that they will submit “before COP 30, which will take place in Brazil from 10 to 21 November later this year, their respective 2035 NDC (National Determined Contributions) covering all economic sectors and all greenhouse gases and in alignment with long-term temperature goal of the Paris Agreement”.

The question is whether Trump’s trade deals include strings attached to its grand strategy of containing China. Then, a good US–EU deal might not be very favourable to China and undermine further EU strategic autonomy.

2. What are the takeaways from the 25th China–EU Summit?

Before the summit, international media and commentators were unanimously agreeing that China–EU ties continue to be overshadowed by ongoing trade tensions and geopolitical grievances, namely in regard to the war in Ukraine and China–Russia relations. On that note, the summit did not shy away from expectations, since positions on those matters, particularly the one on Russia, are just too far apart and will remain as long as the Ukraine war represents an existential threat to EU leadership, reflecting the same sentiment of most of its member states and the European public perception.

However, a summit is always a summit, a diplomatic platform at the highest level, where leaders meet face to face. And the leaders of the EU and China were able to project the idea that dialogue was ongoing even if there were very few tangible results to signal the occasion, no published agenda and no joint communiqué. Previous to the summit, High Representative Kaja Kallas and Foreign Minister Wang Yi met in Brussels on 2 July for the 15th EU–China Strategic Dialogue, and China and EU representatives also met in Beijing on 14 July for the 6th EU–China High-Level Environment Climate Dialogue. The joint declaration on climate was a good deliverable, showing the world that when the EU and China have the political will to cooperate, they can have a joint leading position on world issues and be providers of international public goods.

In regard to trade tensions, which are not only about trade but also investment, industrial policies and different views on the economic processes of globalisation, now seriously undermined by geopolitical considerations, namely by the American factor, there are three kinds of obstacles to overcome. Some are tactical, transactional, give-and-take that can be negotiated. It reminds of the era when Japan was dominating the world car market and the EEC managed to attract Japanese car manufacturers to invest in the Common Market.

There is, however, one major difference from those days. At that time, the technological edge was still with the European manufacturers but that is not what is happening today. China has the most advanced technology on EV cars.

The second issue has to do with securitisation or weaponisation of trade relations. The use of toolboxes by the EU on 5G technology is one example of that category affecting Chinese companies, largely influenced by US agencies. Those non-market issues will not vanish and will eventually get worse in the future, as long as containing China remains a priority in US grand strategy.

The third obstacle is linked to internal regulations. That will eventually affect the access of some categories of services from the EU into the Chinese market, although there have been openings lately and can selectively improve in the future.

One other factor to take into consideration, where both the EU and China are not in very comfortable positions, is related to the tariff war imposed by Trump to the world and subsequent negotiations.

China, the EU and the US are all major markets and crucial markets for each other. There are multiple interdependencies. A favourable settlement between China and the US can lower the EU’s negotiating positions vis-à-vis the two other partners. A worse outcome for China in its deal with the US, which seems less likely, will eventually improve EU negotiating positions vis-à-vis China, but not necessarily the US. However, even in this last instance, the EU is the weakest link among the three. On the one hand its economy is almost stagnant, consumed by war and structural weaknesses identified by the Draghi report. The US is living its non-economic moment, everything that the Trump administration is doing seems anti-international trade in theory and practice. The economic policy of the current US administration is some kind of modern mercantilism, even to the extent in which it has aspirations to acquire more territory. China is still dependent on its export-led economy but is in transition to a dual-circulation model which makes it less exposed to external shocks and is working very hard to find alternative markets.

The question is whether Trump’s trade deals include strings attached to its grand strategy of containing China. Then, a good US–EU deal might not be very favourable to China and undermine further EU strategic autonomy.

Fifty years had gone since 6 May 1975 in Beijing, when Premier Zhou En-Lai and Sir Christopher Soames, Vice-President of the Commission of the EEC (European Economic Community), EU predecessor, established what would become “one of the most influential relationships in the world” (Guo Jiakun, MFA spokesperson). However, the EU seems to be rather on the same geopolitical note as the one described by the then Vice-President of the Commission: “We have a shared determination to be masters in our own house… Both of us a people of yesterday, a people of tomorrow.” (Sir Christopher Soames, 8 May 1975).