The News
Chinese leader Xi Jinping is in Paris as he embarks on a week-long visit to Europe. Beijing hopes the display of bonhomie could help distance Europe from US influence.
On Monday, Xi joined French President Emmanuel Macron and EU Commission chief Ursula von der Leyen for a meeting where the pair pressed Xi on China’s high-capacity exports of cheap green technology that they say hurt European competition. They also warned Xi about potential EU tariffs on Chinese EVs, which could come within weeks.
Xi may be received with more open arms at later stops along his whistlestop tour in Hungary and Serbia, but his visit to France spotlights Macron’s recent campaign to re-envision Europe as strategically independent from the US.
SIGNALS
Xi is doing damage control
China wants to stop the EU from swinging toward the US, and “there will be a renewed charm offensive from Beijing” to try and get the bloc on side. But European lawmakers are deeply concerned about Chinese green tech exports, one Chatham House analyst told the Financial Times, a fear Xi wants to quell. Xi sees France as a potential counterweight to the US; Macron recently advocated European “strategic autonomy” instead of defaulting to US security via NATO. Still, Xi doesn’t want to risk losing the European market, but he is expected to play “hard ball,” and warn EU leaders that restricting Chinese exports could spur retaliation in kind, the FT reported.
EU worries Germany may undermine EV probe
France and Germany are split on how to work with China, and Xi’s agenda reflects the divide. The French government worried inviting German representatives to Xi’s Paris meeting could “undermine” an EU probe into Chinese electric vehicles, French officials told Nikkei Asia; Germany didn’t attend the meeting. Germany’s export-driven economy relies on China: German automakers like Mercedes-Benz, BMW, and Volkswagen are opposed to tariffs on Chinese EVs because they fear retaliatory action from Beijing might blackball them from the crucial Chinese market, as Semafor previously reported.
Cognac is drink of choice for geopolitics
Shortly after France imposed restrictions on Chinese-made EVs last year, Beijing opened an anti-dumping investigation into European brandy, sparking fears among cognac makers in France, including alcohol giant Rémy Martin. Similar tariffs on Australian wine coming into China almost eliminated Australian winemakers from the Chinese market, Reuters reported. The cognac industry is a significant slice of France’s economy, with more than 70,000 employees and $3.6 billion in exports, the majority of which go to China, Bloomberg reported. China has denied the probe was retaliation for France’s EV measures. “Europeans should look for the reasons [about why the probe was launched] within themselves instead of just blaming others,” China’s ambassador to France said.
