MNI: U.S. Policies Will Push EU, China Closer - Senior Advisor
MNI (BEIJING) - Beijing will fancy its chances of drawing the European Union away from its China derisking strategy as the chances of an EU-U.S. deal over tariffs are relatively low, despite Brussels potentially using the prospect of closer ties with Beijing as a bargaining chip with U.S. President Donald Trump, a senior Chinese policy advisor told MNI.
Chinese firms would be ready to share technology and invest in the EU in return for a reduction of trade barriers against their electric vehicles, said Jin Ling, director of the Department of Global Governance and International Organisations at the China Institute of International Studies, a think tank affiliated with the Ministry of Foreign Affairs.
EU rules that have increased foreign direct investment screening would also need to be addressed, she said, adding that China wants to avoid any escalation in trade frictions with Brussels, despite the bloc’s ongoing investigations into Chinese products.
Trump has probably set too high a price over defence and resolution of the war in Ukraine for the EU to be able to accept, so U.S.-EU trade barriers will be hard to avoid, said Jin. However, if Brussels is aggressive in its dealings with Trump, it could make clear to him that it sees boosting ties with China as an alternative, she said.
“The outcome of Trump’s upcoming meeting with Russian President Vladimir Putin will be key for predicting China-EU relations,” she added.
"Whether Europe and the U.S. reach a deal to avoid escalatory tariffs depends on whether Trump's position on Ukraine is acceptable to the EU."
TOUGH TALK
Despite tough talk from Germany’s likely incoming Chancellor Friedrich Merz, Europe is still likely to be willing to make compromises with Washington, such as by lowering tariffs on American cars and boosting imports of U.S. liquefied natural gas, but “Trump’s position on Ukraine could make a deal unacceptable,” Jin said.
European firms would benefit from greater access to China’s services sector and the country’s Smart Cities project, particularly as the government makes further efforts to revive economic growth and further opening up, Jin said.
Beijing and the EU could also deepen collaboration on cross-border data transfers based on the recent China-Germany joint declaration, and cooperate to promote governance of artificial intelligence, an area in which a breach is developing between Brussels and Washington, she added.
China saw 0.4% y/y growth in goods trade with Brussels in 2024, reversing the 7.6% decline in 2023, according to data by China Customs, while a report from Rhodium Group released in October showed a marked uptick of EU FDI into China in Q2 2024 to EUR5.74 billion, the highest in five years. (See MNI INTERVIEW: German FDI In China To Remain Robust Next Year)