Semafor signals
Supported by
Insights from the Financial Times, Sinification and Nikkei Asia
The news
Chinese leader Xi Jinping is in Paris as he embarks on a week-long visit to Europe. Beijing hopes the display could help distance Europe from U.S. influence.
On Monday, Xi met with French President Emmanuel Macron and EU Commission chief Ursula von der Leyen in a meeting where the two Xi pushed on China’s high-performance exports of cheap green technology, which they said was hurting European competition. They also warned Xi about possible EU tariffs on Chinese electric vehicles, which could come within weeks.
Xi may be welcomed with more open arms at later stops on his whistlestop tour in Hungary and Serbia, but his visit to France highlights Macron’s recent campaign to re-imagine Europe as strategically independent of the United States.
SIGNALS
Xi is doing damage control
Sources: Financial Times, Sinification
China wants to prevent the EU from turning to the US and “there will be a renewed charm offensive from Beijing” to try to win the bloc over to its side. But European lawmakers are deeply concerned about Chinese exports of green technologies, a Chatham House analyst told the Financial Times, a fear Xi wants to allay. Xi sees France as a potential counterweight to the US; Macron recently argued for “strategic autonomy” for Europe rather than relying on US security through NATO. Still, Xi doesn’t want to risk losing the European market but is expected to play a “tough hand” and warn EU leaders that restricting Chinese exports could lead to countermeasures in kind, the reported Financial Times.
The EU fears that Germany could undermine the electric vehicle investigation
Sources: Semafor, Nikkei Asia
France and Germany disagree over how to work with China, and Xi’s agenda reflects this divide. The French government feared that inviting German representatives to Xi’s Paris meeting could “undermine” an EU investigation into Chinese electric vehicles, French officials told Nikkei Asia; Germany did not take part in the meeting. Germany’s export-oriented economy relies on China: German automakers such as Mercedes-Benz, BMW and Volkswagen oppose tariffs on Chinese electric vehicles because they fear retaliatory measures from Beijing could drive them out of the important Chinese market, as Semafor previously reported.
Cognac is the drink of choice for geopolitics
Sources: Semafor, Bloomberg, Chinese Embassy in France
Shortly after France imposed restrictions on Chinese-made electric vehicles last year, Beijing launched an anti-dumping investigation into European brandy, sparking fears among cognac makers in France, including alcohol giant Rémy Martin. Reuters reported that similar tariffs on Australian wine entering China have almost driven Australian winemakers out of the Chinese market. The cognac industry is a significant part of the French economy, with more than 70,000 employees and exports worth $3.6 billion, most of which go to China, Bloomberg reported. China has denied that the investigation was in retaliation for France’s electric car measures. “Europeans should look for the reasons [about why the probe was launched] in yourself, rather than just blaming others,” said China’s ambassador to France.
