A new charm offensive? Unpacking Xi’s visit to Europe

A new charm offensive? Unpacking Xi’s visit to Europe

[Music] hello good morning to those joining us in the joining us in the United States and good afternoon to our viewers in Europe my name is lar I’m a visiting fellow at the Atlantic council’s Europe center it’s a pleasure to open this event today on behalf of the Europe Center and the global China Hub here at the Atlantic Council where we’ll unpack China’s relationship with Europe ahead of next week’s visits by President Sian ping to France Serbia and Hungary as our audience will know for years now the EU has described its relationship with China as one of competition cooperation and systemic rivalry Allin one but most recently we’ve seen some ships with the European commission driving forward a drisking agenda reflecting a real sense of our needs in Europe’s relationship with China the EU has further expanded in its toolbox with the adoption of the eu’s anti- coration instrument new investigations into the Chinese market practice IES from EVS to medical devices and the release of an economic security strategy including new initiatives on FDI export controls and outbound Investments China’s enduring support and partnership with Russia since the fullscale invasion of Ukraine made it hard to separate China from Russia’s legal and violent challenge to Europe security and over the over the last few weeks Europe has been rocked by allegations of Chinese Espionage and at the same time and maybe because of this Beijing has stepped up its diplomatic efforts with Europe on May 5th president Sian ping will embark on a Six-Day trip to Paris Belgrade and Budapest his first trip to the continent since 2019 this trip is coming on the back of German Chancellor schz and Dutch prime minister Mark Rutter’s Z visits to Beijing which to some call into question how unified Europe is on China all the while we’re watching here from Washington how the visit will go and what this will mean for transatlantic coordination on China we have a lot to discuss and I’m eager to hear from today’s panelists so I’ll live it here before I turn over uh to my uh colleagues um I I just want to invite everyone to follow along with the council’s work on China through or Global China Hub and stay connected on all things Europe and transatlantic Affairs through the Europe Center transatlantic relations series with charts and ambitious agenda for the United States and Europe for 2025 and Beyond so without further Ado uh let me uh welcome uh my great group of experts around the virtual table so joining us from Paris we have fra goodon special advisor and Resident senior fellow for Asia and America at the Institute mon from DC we have our very own Dave Schulman senior director of the Atlantic council’s Global China Hub we also have Noah buckin senior adviser at rodium group and Senior fellow at the German Marshal fund where he writes the now famous watching China and Europe newsletter and finally finally we have Stephan vladis Sav program director at the bgrd fund for political Excellence for responsible Society who’s an expert on China’s pres in Serbia and the Western balcans before I jump right into the discussion a quick note on housekeeping we’d love to hear your audience questions you can submit your questions at ask ac. or ask a.org make sure to follow us on Twitter and AC Europe as well with that I’d like to start with my opening question to fris uh a more general question on the Optics of the visit from a European perspective of she choosing these three countries as a first trip to the EU since the pandemic began um when she sits down with MCO and vayan for talks what messages will the Europeans be trying to get across and uh what will France also be trying to get across sorry I was UN mute I’m unmuted thanks Leon uh for your introduction and I’ll try to answer your questions first noting that if there is a charm offensive it’s been going on for more than a year with sweet talking by Chinese Diplomat but usually not accompanied by any concessions that we might have noticed so facts are a bit behind the curve is seting Ping going to change that I have my doubts because the charm offensive that’s focusing mainly on Serbia and Hungary of course also in France which is unavoidable in a way as a partner but which is here is taken uh in the Chinese interpretation as the uh autonomous or independent country that President macron sometime talks about so it’s not completely inconsistent with the choice of Serbia and Hungary even though the French obviously would not recognize it second did President cting ping know a few weeks ago that osula V deran would be in Paris and would be talking to him at the same time I’m not absolutely sure of that uh especially given the fact that Chancellor Schultz had gone to Beijing uh a few weeks ago without even a peep about Europe uh and as a purely bilateral German visit so this in effect set a quite a different stage uh for president macron first to have met centr Char yesterday night uh and presumably confirmed about the the the meeting with c and second to bring uh uh Mrs vanan alone along uh for the past few years Chinese negotiators have studiously avoided Brussels and mostly focused on bilateral relations while the diplomats have usually complained in European capitals about what what they call an unacceptable line from Brussels they usually focus on systemic rivalry now they are talking about the anti-dumping investigation on EVS so it’s not a a a completely Rosy uh surrounding uh that is there for this visit thank you so much fr before I turn to our other uh European guests uh Dave you’re or China expert at the council um so I would love to hear from you what China is looking for and uh your reaction to FR remark as to uh the charm offensive has been going on and uh but at the same time Europe has changed uh since uh since this charm offensive began uh thanks thanks Loney great to be on this panel and uh I agree with everything that uh from said I think you know this is if it’s a term offensive which I think it is it’s has been going on for some time now this is just obviously at the higher level now with shiin ping himself coming to Europe um and I think the goal broadly is to try to stem uh what has been a fairly remarkable deterioration if you step back uh and look at this in the broader sweep of of of years uh in China’s ties with Europe um and I think she wants to prevent EU actions in further alignment with the United States in areal areas critical to China such as on economic issues and tariffs but as FR said to do all of this by offering words and not deeds and I will be very surprised if she comes ready to offer any concessions on the eu’s I think very legitimate concerns about China’s policies um I think specifically in in France you know she will be coming to look to to somewhat to repair relations in Europe that have been significantly damaged by China’s support for Russia’s war on Ukraine prevent the further Blas listing of Chinese companies by the EU that have supported Russia um and I think you know China again wants to stem the bleeding portray China as a responsible player not as Russia’s benefactor um but without any concessions that I would expect on its Aid and support for Russia and United States and secretary blinkin have been um pushing even even harder on this notion that that China has been supporting Russia’s ability to rebuild its defense industrial base and offering all these dual use equipment uh to the Russians that are helping them to prosecute um their illegal war on Ukraine um and I think we also aren’t expecting to see anything in terms of Russia’s China’s willingness to push Russia to come to the table uh for negotiations that are based on anything uh looking like an actual withdrawal uh from territory gained in Ukraine um so I think that’s that’s what we’re going to see on the Russia front and then you know Fran mentioned the economic issues I think perhaps these are most immediate you know China wants to Blunt The eu’s Economic Security agenda Visa V China its efforts to level the playing field and there’s probably some Hope on she’s part that he can move France’s position on potential tariffs and other issues more toward the German position away from Brussels uh there will be a lot of talk about economic complimentarity uh there’s again no no coincidence here that this is a time when the EU is threatening tariffs France has been a leader in pushing for the commission’s investigation into China’s EV subsidies um but I don’t think there’s going to be any consessions here either on China’s over capacity push uh its subsidies or anything that Europe wants uh at this time uh so I think Beijing is betting that EU member states disunity uh the enduring draw of the China Market these are all going to collectively stall uh the economic measures that Europe Europe is considering um and as I’m sure others will talk about you know China has some good reasons to think this given what we’ve seen uh from Chancellor Schultz’s visit uh and from other things out of out of other countries in Europe so on these two areas support for Russia China’s economic practices she’s really going to be looking to paper over the cost of China’s positions and prevent both Unity within Europe and greater alignment with the United States and I think the messaging in France is going to underscore you know Europe as an independent poll in an increasingly multi-polar world don’t side with an unnamed uh other player on issues that don’t really align with with European interest thank you so much uh Dave now if I could turn to Noah um Fran and Dave have opened with the the issue of European unity and uh uh I’d be interested in your pers perspective uh from the German point of view uh and relative to France uh how how is is SCH going to manage are we going to have uh common and coordinated messaging between France and Germany uh what are the outstanding issues on on China well thanks Leoni and thanks to the Atlantic Council for having me very good to to be here um I I think uh Germany uh Germany came out with a China strategy last year uh almost a year ago uh that used tougher language than Germany has used in the past on China um the focus was very much on drisking on diversification reducing dependencies uh and and also embedding uh the German approach to China in a more European umbrella um I don’t think we’ve seen a lot of any of that uh in in the year since this strategy uh was unveiled uh I think the the divisions within the German government are well documented we have a a coalition government here in Berlin the greens uh who hold the foreign and economy Ministries have been quite hawkish and they were the driving force behind this this China strategy uh and the chancellor Olaf Schultz uh is more risk averse and I think um uh you know the economic backdrop in Germany at the moment uh is playing a a role in this um uh you know Germany uh was had had an addiction to Russian gas uh and that was shut off uh overnight uh and uh there’s a great deal of concern about energy prices here about de-industrialization big companies are uh cutting jobs in ger Germany investing uh in China and in the United States uh maon warned about this in in his Europe speech uh uh several days ago um so so there is a a degree of risk aversion and we saw that on the Schultz trip to uh Beijing uh where Schultz I think in his public remarks we don’t know what he said to she behind closed doors but in his public remarks uh I thought um uh very mild comments uh both on the trade issues you know playing down the issue of subsidies and overc capacities uh and not really expressing any serious concerns about uh try to support for Russia which uh uh Janet Yellen a week before Schultz and and Anthony blinkin uh a week or two after him uh that this was their main message so um so we had have a we have a bit of a divided government here in Germany and and I don’t think Europe is uh United I think Ursula ferline has tried over the past year to sort of herd the cats uh towards the common policy uh and I I think she’s done a good job of that laying out a clear agenda uh but we’re clearly not there yet and I think the fact that Schultz is unlikely to go to Paris for this meeting with she uh uh this will be maon and funder lion I believe uh you know the contrast with five years ago when Mar Jean CLA junker uh and maon sat down with she is is quite Stark and uh I’m sure uh China you know Shin for xiin Ping he’s he’s happy to have Schultz uh uh uh sitting in Berlin or wherever he’s going to be thank you Noah um now I’ll turn to uh or last speaker Stefan um I’d be interested uh again staying on the issue of unity and the Optics of this visit um if you had a word on Hungary and on uh China’s GE geopolitical interest in the W Western balcans in general and what role Serbia is playing um in in that region well first of all thank you for the invite and uh it is something definitely that needs to be looked as a very specific issue in the broader context of not only shing’s visit to Europe uh from fifth to 10th but in general developments over the past decade decade or so and on one side Hungary and on other side Western Bans are very two different cases with one stapled Hungary being part of European union and Western Balan countries being aspiring countries and potential members with Serbia as a leading prime example of how you can actually be very open to the Chinese influence and to above mentioned charm charm offensive but expectations from the visits are quite similar uh we are expecting narratives both in Belgrade but also in Budapest which will pretty much glorify what has been done so far in the development of bilateral relationship putting it outside of the context or either functioning within the EU system for Hungary or functioning within the European integration model which a country that has a candidate status should walk to if we are def finding European position currently as the one of the risking Serbia is a country that has recently signed the FTA agreement with China that has slowly developing military and defense cooperation with China and has China is a number one provider of foreign direct investments in a country is pretty much doing opposite of what the risking should or is again as a as a country that doesn’t have European union membership status Serbian authorities are often describing this approach as a something that as a sovereign country and autonomous country they have full right to do so which one can or cannot dispute depending on the fact whether do you want to see Serbia as a part of European Union tomorrow or you do not so that is a question that is hanging about the heads of the Serbian decision makers but uh I don’t expect that we will hear any definitive answer during the visit we will be um focusing mostly on on the bilateral relationship between Belgrade and Beijing the celebration of the past 15 years of still friendship which is one of the terms often used to describe partnership between Serbia and China but we will also uh not really uh put into the context of European integration or some of the potentially negative consequences that have came out of the uh increased Chinese presence in Serbia both in the political but also in economic economic spectrum as well thank you Stefan I think we’ve we’ve had a really broad overview of of in general how China’s approaching the region and uh what are the overarching goals uh I’d be interested to hear from each of you um now what are two or three deliverables that uh uh Europeans want out of this uh is there anything any positive agenda uh or negative agenda that uh you could point us to um fris on France of course Noah on Germany and Hungary and and Stefan on uh on Serbia and and Dave uh I would love for you to conclude on uh how the US is viewing all of this um uh these evolutions and these deliverables that are that that that may come out from these visits uh over to you FR let’s be very concrete uh and start with small things uh over the nearly in the past decade China has only delivered two kinds of concessions to the EU one is usually about agricultural exports everybody forgets that for so-called Health reason various meats and what we call Shak uh prepared meat are ban in China but China has this game of you know slowly letting in Ireland Poland the French I think gain shakri I hear that Chancellor so gained beef but failed to gain por at his last visit that’s the kind of thing that leaves a margin for the Chinese negotiators the second thing is Grand global politics common goods the French rejoiced in the past that at Kali uh they got some kind of agreement on biodiversity there’s been stuff about uh preventing deforestation although preventing deforestation in China has meant that the Chinese by wood or all over the world and and and you know sometimes has the opposite this kind of thing I think has about run its course then we have got FDI Chinese FDI now and the country that looks like it’s cashing in is Hungary it’s already cashed in a byd factory I’m wondering whether there’ll be a second deal uh during C Ping’s visit which would be a message by the way to the others and to Brussels uh about the uh investigation on subsidies it when Europe know we’re already in Europe Europe in the single Market thanks to Hungary perhaps even with EU structural funds helping uh and that’s something uh that the Chinese could do rather easily I don’t expect that the French will succeed in what they have tried to do uh including when C when when macron was in ping which was get an EV factory byd factory in France for various reasons it’s unlikely uh to happen then let’s jump on to bigger things the one big Collective ask at least from most member states would be Russia Ukraine as I think Dave correctly said we’re very unlikely to get it and the ones who are able to set red lines to prevent the Chinese from overstepping uh some of these red lines which currently merely means uh refraining from exporting weapons themselves perhaps dual use items yes but weapons no it’s the United States rather than Europe Europe but I think uh that the fact that VLAN also former Minister of Defense from Germany uh before being the EU commissioner uh and macron are going to repeat again to cting Ping how much uh this is unacceptable other types of deliveries I’m thinking putting myself in French shoes uh so to speak that uh it’s not out of the question to start discussing Gaza and Israel uh because there are some commonalities in the French position which has often had the UN refrain from taking the side of Israel and abstain in some cases uh because the rhetorics of China uh regarding an immediate ceasefire humanitarian Aid and so forth uh is something that could resonate that would be I would say a kind of rhetorical uh and diplomatic gain for China I’m not sure that the French are ready to concede it but to me it’s a possibility if one looks for you know positive things uh to be taken out uh of the meeting uh I would be amazed uh given that president that president of the commission vanan is going to be here if the French immediately made significative noises uh on resending uh the anti-dumping investigation on cars but I know that the Auto industry in Europe is now in complete disarray everybody bargaining for himself with the Chinese literally with you know whatever leverage each company has and though the setting is not particularly good uh for the anti-dumping uh methods or the anti-dumping results to be uh approved by the council that’s going to be a big fight and I think that because for seting Ping Europe is a is really an economic issue it’s not strategic issue I don’t think they take us very seriously they’re happy to cash in uh if we distance ourselves from America and they keep repeating to us that we should uh but in fact they know that whether we distance ourselves or not doesn’t change a hell of a lot the basic strategic situation which is they are confronting America thank you fris um I I would after this it would be really interesting to unpack uh what you and no think about the future of the auto sector in Europe but before that uh Noah what are your two or three deliverables for uh the visits from uh you know a German point of view since they were invited to this dinner and and from the Hungarian point of view as well well first I have to correct FIS um for a glaring Omission Schultz got apples as well as beef um uh don’t for get the apples fris um he did not get pork uh look I I fully agree with fris we we kind of beyond the point I think in this relationship where uh we can expect big deliverables from from meetings like this I I think the big aim from uh from M’s perspective from Fond lian’s perspective is really to have the opportunity to sit down with xiin ping uh and uh reiterate the message on trade on China Russia um opportunities to sit down with she are are are rare uh we don’t know what he hears from uh the people under him uh so I I think this is another opportunity for for European leaders to sit down and explain the seriousness of their concerns uh about uh about China’s support for Russia uh uh I think there will be a message that um uh that the G7 could move uh could have no other option but to move towards more robust sanctions against Chinese companies if uh uh I I if if the uh the government in in in Beijing is not um is not cracking down on on the these companies that are transferring uh Technologies to Russia uh look I I think probably uh if you ask um uh French uh cognac makers they would they would hope for some uh some deliverable from shei some pledge that uh Beijing will not retaliate uh if uh if this EV investigation goes ahead uh I don’t think they’re going to get that uh I think the EV investigation is going to go ahead and even if we know that uh German car makers don’t don’t like it we know that Schultz based on what he said in Beijing doesn’t like it I don’t see a way that the Germans can stop this although I believe there are some concerns in Brussels these days that uh that it could try um so I I think we need to to go into this with low expectations um and you know if we look at the at the other legs of the trip Beyond Paris uh the message really will be I I assume there will be some event around the uh the 25th anniversary of the bombing us bombing of the Chinese Embassy in Belgrade um uh so there will be that that that message coming out of this um and there will be uh you know in Hungary there’s going to be I believe a some sort of ceremony uh to Mark the investment by a Chinese Chinese car company in in uh in Hungary uh so from the Chinese perspective those are are the deliverables from the hungaryan and Serbian perspective perhaps also I don’t expect big deliverables on the Paris Lake uh thank you Noah uh over to you Stefan on uh especially Serbia well first I have to not is that the context in which we are uh looking at the Grand picture of EU or european China relationship is much different than the one when we are talking about bilateral relationship between Serbia Serbia and China and I think that Serbian approach has been often a little bit more pragmatis and I would actually state that the first deliverable that will happen out of the visit is the visit itself because it will provide additional legitimacy and additional leverage to the current ruling majority in Serbia including the Serbian President Alexander vui with the fact that he and his party and his government managed to bring another high level political leader that has a global presence to Country to a small country like like like Serbia but when it comes to the more specific deliverables the one that obviously has been on Serbian radar for years is money and that money is coming to Serbia either through foreign direct investment as I mentioned China has in 2021 became the sole biggest provider of foreign direct investment for Serbia to put it simply China is investing more than any individual European country currently in Serbia and for a country and for a government that lives and dies out of the economic progress numbers that is a very very important aspect of the cooperation so basically there will be examination of what new projects can Serbia and China do together just yesterday we had an announcement that the Chinese company power China will construct a national football stadium which is supposed to be built by 2026 so in that premise with that premise and in that that sense new agreements that are either financed by the Chinese loans or a potentially a foreign direct investment the second deliverable is continuous support on the principle of territorial Integrity that is probably the sole most important political alignment between Serbia and China at this point on on one side Serbia although participates in the dialogue process facilitated by European Union when it comes to the Serbia Kosovo dialogue still seeks actively Partners in disputing the Koso Independence on the global scale and China was quite vocal not against the statehood of kosov but for the respect of the principle of territorial Integrity for very clear reasons not because even it loves Seria that much but because it goes very nice uh in its favor and in spreading the message about what the stance of Beijing is on the principle of territorial integrity and finally the third deliverable is a message about the need of reshaping the global governance system this one goes more to China than for Serbia who has been quite vocal about this but on much smaller scale and uh rightfully mentioned bombing of the Chinese Embassy which will be uh marked the 25th years uh 25th year anniversary on on May 7th will be a chance to once again reiterate what China has been saying for years now and that is that there is a need from Chinese perspective for the reshaping of the of the global governance and the visit to Belgrade could be the best Stage to do so because Serbia is the one that has been uh riding the both waves so the both part both practicing Partnerships with the countries from the Western liberal democracies but also Eastern not so Democratic countries or the one that are in line with what the liberal Democratic Values today are thank you Stefan uh Dave uh what’s the view from from the US side um you know verer Lane has pushed a very strong agenda and tried to keep you uh EU Unity uh there are elections on both sides I think also the good relations between uh the EU and the US also hinged on the relationship between the two leaders um what are uh your views on on uh where the US is at now and and where it would be in in in six months on EU um and and um well I’ll stay away from speculating on what happens uh in November um but I think you know and this has already been mentioned I think by Noah you know you you just had uh the visit by um Secretary of State blinkin uh to China and then before that um secretary Yellen and if you look at us priorities as it relates to China um they’re you know very similar right now to what the Europeans are focused on the message was on um you know China needing to address overc capacity China not kind of using this state L manufacturing push to save its economy at the costs of these nent uh green Industries in the United States and this is also obviously a big concern um for Europe uh Economic Security uh issues and you mentioned you know you mentioned miss miss ferline you me we’ve mentioned already you know German Germany’s China strategy there has been in the United States in Washington a fair amount of hope uh in terms of watching where Europe has been going uh on China uh particularly over the last year I think Miss ferline speech was a little over a year ago now on drisking um and kind of putting some hope in the sense that uh we can be more aligned on these issues economic issues technology issues as they relate to China we have the trade and Technology Council which is meant to kind of create more alignment on those issues uh between Washington uh and Brussels um and so I think the Hope out of this visit is is is mostly a um a negative hope which is there’s nothing that comes out of this um that further you know throws a wrench in hopes that that we can be more aligned on some of these issues because I think there is a genuine understanding uh in Washington and particularly in the Biden Administration um that without alignment with with Brussels and hopefully with the key member states in Europe on these issues um whatever kind of progress we make on Economic Security on things like um you know investment screening outbound investment screening and also dealing with these over capacity issues um is is not going to be very productive and that also extends to the tech space right and Export controls and important Dynamics involving the Netherlands and others on on ensuring uh that uh that there’s controls on on on Technologies emerging technologies that relate to National Security issues um so I think the Hope out of this is that you don’t have coming out of particular the visit um to France something that indicates that that level of alignment is not going to be there going forward and that and that the divisions that I mentioned already and that we’ve talked about within Europe do not put at risk uh all the progress that at least we’ve started to make in terms of taking a more aligned tougher approach to China on a range of different topics and I think you know In The Same Spirit we all you know kind of uh let France Mo talk about it we’re kind of focused the last time mcon met with uh met with she and the kind of comments on the plane afterwards that kind of took over the narrative on it about about Taiwan and not following the US lead I think there’s certainly a Hope from the United States uh that um that there won’t kind of be any um comments uh that that show significant daylight between uh the US uh and key Partners in Europe on some of these issues that that dominate um that dominate The Narrative and then lastly I’ll just say on the the serban Hungary point I mean I think from the United States there’s a a hope and an understanding that that very tight relationship that China has with both of those countries um and Stefan has laid out very nicely all the Contours of those relationships that that M remains contained to those countries right I think there’s been you know more broadly a sense that Central and Eastern Europe even more than the rest of Europe has kind of um uh been awakened to the the false promises of the belt and Road initiative um and of course have been very closely paying attention to China’s support for Russia the 17 plus1 uh you know uh institution basically fell apart over the last several years and so I think um from the United States perspective just um you know uh expecting that those relationships are going to to deepen and that there you’re going to have uh Xin ping showcasing its its close friends uh in in Europe and in uh in the U uh in the Hungary case and in the western Balkans in Serbia but that that is not representative of where uh Central and Eastern Europe is going on the China front uh thank you Dave H just before we turn to e um for given the impact that M’s comments on Taiwan had during the last visit uh do you have a quick uh response as to what we should expect in terms of messaging from him this time you’re on mute sir fris sorry I don’t have a sense of how and when maon speaks out on these issues I think he very much holds to sticking to what he thinks a median line uh a balanced position which is not the same as being a a balancing Power by the way the translation in English somehow exaggerates uh his position uh but look at the interview he gave just a few days ago where he speaks as much of being autonomous from the United States in terms of decision making not having to align in fact doesn’t speak hell of a lot about China that doesn’t mean he doesn’t have China on his mind but in practice he wants to be shielded from unwanted decisions or uncoordinated decisions from the US and that’s going to remain uh I think it’s going to reappear from time to time does he use it opportunistically to try and gain Brony points or to sort of you know find points of convergence uh with cting ping at this point I’m not so sure because there’s been the Russian experience with Putin for example and because the uh fallout from the trip in ping and especially the interview on the on the plane back which has been mentioned was catastrophic uh but I have no doubt uh that he will not be on the Forefront about Taiwan uh that he will leave it uh to others perhaps to the EU Parliament uh or to the United States States uh and I have no doubt uh that he will still try to in effect do something that the Biden Administration has also been trying to do which is keep engagement keep talking keep trying and and and getting the Chinese and cting ping to move their position so in terms of rhetorics I think it’s it’s it he’s not going to be controversial uh unless of course a president sitting P decides to really become angry publicly about some of the developments of the past few weeks uh that could happen uh I’m wondering about the the the photography uh the photo that was taken uh at the Eliz of of shaking hands with the representative of the dama and with the uh uh diplomatic Delegate for the the so-called delegate from Taiwan de facto Ambassador uh looking uh nearby that’s not a very good uh backdrop probably for the meeting but my feeling is on balance sitting bin will do his best to ignore it to stick to his line which is France is now uh non align autonomous country trying to steer Europe perhaps in another direction we have friendly relations from 60 years back it won’t mean a thing in terms of actual concession and if I was a a manufacturer or seller of of of of coac Noah I would still be very worried about what’s going to happen in the next few weeks but that’s going to show up in words Mr sitting pink does not always uh announce in advance what his actions will be thank you FR um I want audience question for a Dave but before that I really really want to hear both Noah and fris on the reports you both wrote at a few days interval I think in April on the future of the auto sector in Europe um these paper respond to the EU having launched an anti- subsidi in investigation on EVS in October 2023 so starting with Noah what are what are for you the recommendations for the future of the auto uh sector in Europe um and just a reminder that we have 15 minutes late and I have one audience question so if you could just uh answer broadly in in a few minutes uh what you think thank you well first of all uh I I did read FIS paper and thought it was excellent um uh we we came out with a a paper uh about a week ago I think which uh essentially uh we looked at the uh consumer prices of uh uh cars exported from China both Chinese Brands European us Brands like Tesla uh the cons the prices that they sell them in China and in the US uh and in Europe and we looked at the costs and uh the the conclusion we came to and I think it it echoes uh what what FIS uh wrote uh is that uh Chinese Brands like byd uh can take uh quite quite High uh uh duties from the European uh commission and still uh make a profit uh in Europe so in our paper Bas based on past cases uh and and based on conversations we had with various officials we expect the commission to uh impose duties uh provisional duties probably before July of in the 15 to 30% range uh we make the argument based on the numbers that um uh that the E would have to impose duties of 50% or more to seriously slow down a company like B now I don’t think we can expect duties at that level uh which means and and and and this takes us to a speech that Margarita vtiger the competition commissioner in Brussels gave uh a couple weeks ago at Princeton University um it’s going to force Europe to look at other measures uh vtiger described the use of trade defense and Level Playing Field tools as a sort of whack-a-mole approach and called for a more systematic comprehensive Ive uh response to the distortions from Chinese overc capacity subsidies Etc uh and so I think this is going to be a discussion you know whether it’s environmental criteria which Francis has has used in its subsidy scheme for ievs whether it’s labor rights uh whether it’s data or cyber security standards um there is going to be a debate not under this commission but I think under the next Comm Mission about uh additional measures that can be taken to uh to Shield uh European industry F over to you on your recommendations I I I fully agree with Noah and I read I read with even greater interest the actual price comparisons they made I draw further conclusions from those findings one we do have a problem of overpricing cars in Europe compared to the US compared to Japan not only compared to China uh Japanese companies for example make volume in the US producing in the US largely make profits in Europe over volume even if they do produce a bit in Europe so this is not completely new and it’s a real challenge to the car industry second uh unfortunately uh the only thing that might help us would be if the next Administration uh read my lips David would be a different one uh in this case would impose such high duties on Chinese cars that we would have to follow suit unless we want to be the market of Last Resort uh and that might provide a shield uh from what is otherwise going to be a tsunami uh of Chinese cars once they know how to distribute them once they find a way to repair the batteries and there are still issues uh there three we’re not going to avoid Chinese cars completely so what is absolutely dumbing what is really hurting and this has deteriorated even after we wrote Our pieces Noah uh is the fact that several countries are now negotiating each for themselves car factories with awful conditions Italy has just signed a deal for with essentially a knockdown kit uh entirely imported from China and assembled near Naples uh Hungary itself it’s a 100% B the own Factory uh in in Hungary with sweet deal sweet conditions for environments uh which would not be accepted elsewhere uh in Europe uh Spain has just negotiated uh a deal with shall we say minor not a not an overly uh important Chinese producer the French are now trying each for themselves to reach settlement with some Chinese Partners so the net result of the German Auto industry chiefly damler and BMW incredible lobbying against any form of Duties has been to push every one of their competitors in the hand in in the in the arms of the Chinese I’m not sure this is will ultimately help damler and BMW to be specific and I know that VW for example the head of VW in China has recently expressed his worry about the fate of subcontractors suppliers in Europe voicing a quite a different stand on that perspective uh from from from dler and of course because uh VW is not a is not a premium brand manufacturer in the main and even though it has huge interests in China it’s going to be challenged first my solution for this is indeed a degree of shielding European industry but we have to do it very carefully because in the past they avoided change uh through the price protection that they enjoyed they kept profits so we cannot you know uh go back on our Greening uh design and we should find ways uh that The Shield is effective in transforming uh the Auto industry rather than protecting the present industry as it runs and that’s a difficult task I recognize but the the the the the situation is going to be there in other Industries I just read a report for example on the the offshore wind and electral disase Industry which arrives pretty much at the same recommendations thank you uh thank you f we I’ll turn on to audience questions now we actually have time for more than one so I will start uh with Noah again what is the future of the eu’s risking agenda particularly as we look to the European elections and the next European commission mandate can Europe do much more to reduce its Reliance on China well I think this is a a really big question Leoni um look I think a lot depends on whether orsula ferine returns as uh president of the European commission um she has as we know launched this Economic Security Str strategy she is the one behind the very robust use of the Eevees trade defense tools Level Playing Field uh tools so uh while I don’t think um uh you know if we have a change at the top of the commission that uh we’re going to uh go into reverse and and and uh Europe’s policies towards China will be turned on their head I do think that over the past year especially it has been funder line who’s really been driving uh the agenda in Europe on China and forcing the member states to engage with that agenda so I think I do think uh uh you know the whether she’s able to stay on as head of the commission and we’ll only know that after the elections I I was interested to to read uh last week that uh maon is um uh talking to uh Georgia Maloney about perhaps installing Mario dragi at the to of the commission uh I I take all of that with a bit of a grain of salt um uh my sense is that M probably wants to send fundline the message that she shouldn’t uh uh count on his support that he may come asking for certain presence and she better deliver or he can withdraw his support um I think it’s going to be very difficult for Schultz to not to back her um uh so I I still think she has a good chance um but you know Europe’s drisking strategy is uh you know it has an uncertain future I think um uh you know drisking is in the eye of the beholder um I was just talking with someone here in Berlin yesterday who is kind of at the heart of this debate in the German government uh and uh you know he admitted to me that um uh that that companies are are you know are are all implementing their own uh their own version uh of drisking and we heard from uh for example the Mercedes CEO olenus that drisking for him means more investment in in China and I think a few of the other car makers would probably agree so I think there are big questions about this of course the commission has goals under its uh uh critical raw materials Act Net Zero industry act to to reduce dependencies on China um but this is going to be this is going to be a hard slog and I think you know we won’t know the the answer to this for another five to 10 years probably thank you uh thank you Noah on a on a also a long medium long term uh perspective uh because EU integration is such so high on the agenda right now and very important topic for the Europe Center as well um how uh how has China’s Investments uh in Serbia um impacted European integration according to you Stefan well uh Chinese investment uh per se did not impact the European integration of Serbia how the Serbian government treated some of the aspects of those Investments have been quite harmful to the state of rule of law Serbia also has increased a certain uh negative impacts when it comes to the Environmental Protection and we had some cases of mistreatment of Labor and labor forces uh Serbia as a country has been very very wel welcome to the foreign investors at large Serbian model of Economic Development pretty much depends lives and dies out of the foreign direct investment what has happened over the past 15 years years especially since 2016 and then 2018 that Chinese presence in the FDA in in the FDI uh portion of Serbian economy has been steady steadily increasing and with the increased number of Chinese companies being present we have seen more and more mistreatments of some of the standards procedures rules and laws that have been established as part of Serbia’s approach towards the EU integration EU integration process is Serbia dependent on the Chinese investment no is Serbia uh dependent on the investment that are coming from European Union no is China alternative to the European integration partnership with China in different aspect again that’s going to be a triple no uh from from my side but what has been slowly creating a distance between Serbia as a relevant candidate for the European membership is that our government has unfortunately decided that the shortterm benefits of Economic Development have been more important than building the Democratic institutions and pretty much practicing the values and and practices that are in line with Democratic liberal values that should be not always but should be in the heart of European European union and transatlantic uh partnership as well China on another side was very good facilitator of those Trends not really making Serbia do anything to improve what has not been working but on the other on other side that is why China was such an appealing partner for Serbia because a lot of those uh Financial agreements in the shape of loans and foreign direct investment came without any conditionality which was very very welcomed by the Serbian government and Serbian officials who have been again steadily developing partnership with China in that area for more than a decade now thank you Stefan um I have one last question for from the audience before we wrap up uh for Dave uh given the evolution of the relationship between uh China and Russia um after the war in Ukraine um what are some of the uh H how do you see the the the relationship impacting Europe Europe and um do you have uh any views on on where this uh discussion could move forward on the European side well that’s a good question we could probably spend a whole hour additional hour on that um I’ll just say from the from the China side I mean I think we’ve all watched um you know what’s what’s happened with with Russia’s um um you know military efforts in Ukraine and then also seen what’s happening with Russia’s economy so the question is often uh you know why is there still value to China from this uh relationship with Russia given its its failings that we we’ve seen and certainly the damage to China’s relationships globally especially in Europe that has come from China’s support for Russia um Russia you know just quickly is is China’s most important strategic partner without question so it’s going to continue uh to maintain that relationship uh on the security front uh in international organizations on the messaging front in an effort to revise the global order so as that relates to to Europe I mean I’m curious if we had time what what the others on the panel think but I think you know China is clearly betting that what it can do is maintain that relationship with Russia which it’s unwilling to give up and still um maintain close ties with Europe as I said at the outset because of China’s economic importance to Europe and China’s hope that it can continue to create this wedge uh between the US uh and Brussels and key member states on key topics uh and that these these movements toward a tougher position on China will ultimately not stand a test of time because of that economic importance um I think you know longer term uh when we talk about the Strategic importance uh of Russia to China part of that is uh in the notion of um if something were happen to happen in the security front in East Asia particularly a Taiwan straight type of Crisis that you could have uh Russia doing things in the European theater um that would distract uh NATO would distract the United States would distract uh key European Partners from participating and supporting uh efforts to push back on Chinese aggression in East Asia um so I think that that’s part of China’s calculus here but I know we’re out of time I’ll stop there but I think this is a really big question and a lot of policy makers in Washington are thinking about obviously these connections between China and Russia as well as with uh Iran and North Korea and what this means uh for the future and how the US and Europe and our allies in Northeast Asia uh should be thinking about those connections going forward thank you so much da Dave for these concluding uh words on uh which kind of leaves an opening for maybe a next conversation on what the US thinks of strategic simultaneity and how does that relate to Europe and uh and to China as well um so I feel like we’ve covered a lot of ground here especially on what I see as the two outstanding um topics for this big visit so economic issues with the EU at the center of it and then Russia China relations of course uh given the importance of uh this agenda for for Europe um so thank you so much again for our panelists for joining today for our audience as well and we’ll certainly as I mentioned before pick up these conversations again this year so stay tuned and thanks again thanks [Music]

The European Union describes China as a three-part “partner for cooperation, an economic competitor and a systemic rival.” Now, growing concerns in Europe over strategic dependencies on China’s, the vulnerability to economic coercion, and ties to Russia have sparked debate in Europe over the future of Europe’s relationship with Beijing. Suspicion over Chinese efforts to flood the European market with cheap exports have further caused Brussels to open investigations into China’s economic practices.

At the same time, Beijing has stepped up its diplomatic efforts with Europe. President Xi Jinping will have talks in Paris, Belgrade, and Budapest on May 5-10, and Xi recently hosted German Chancellor Olaf Scholz and Dutch Prime Minister Mark Rutte in China for discussions on their respective relationships with China. Meanwhile, the United States is pushing greater coordination with Europe on a transatlantic approach to China. All the while, elections in Europe and the United States add another layer of uncertainty for Europe’s and the United States’ future relations with China.

Ahead of the upcoming European elections and the new European Commission mandate, what will be the future of the EU’s China strategy be amidst increased great power competition and implications for transatlantic relations? Is the EU doing enough to bolster its economic security and information integrity?

For further information, please visit: https://www.atlanticcouncil.org/event/a-new-charm-offensive-unpacking-xis-visit-to-europe/

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