As China and the EU meet to discuss Russia, huge trade relations have emerged

Hong Kong
CNN business

China and top European leaders will meet on Friday as their huge and growing trade relationship could be overshadowed by disagreements over Russia and other geopolitical tensions.

At the EU-China virtual summit, Beijing is expected to face pressure from one of its main trading partners over the war in Ukraine, which the European Union says will be a major focus of the talks. Chinese President Xi Jingping and Prime Minister Li Keqiang will also discuss business relations, human rights and climate change with European Council President Charles Michel and European Commission President Ursula Von der Leyen.

Europe trades more with China than anyone else. But in recent weeks, concerns in the West have grown over Beijing’s refusal to condemn Russia’s invasion of Ukraine.

“Senior EU officials have tried unsuccessfully to persuade Beijing to push Moscow towards de-escalation,” Eurasia Group experts said on Tuesday. “[They] will now seek to recruit Xi, but there is a feeling in Brussels that China is not interested in putting pressure on Russia.

The difference over the Russia-Ukraine crisis runs counter to the economic ties between China and Europe, which deepened during the coronavir pandemic.

Here’s a look at where everything is and what’s at stake.

China abstained from voting on the UN Security Council resolution condemning the February Russia’s invasion of Ukraine, which is worrying for many Western countries.

“China’s handling of the conflict will affect future EU-China relations,” Reinhard Butikofer, head of the European Parliament’s delegation for relations with China, told reporters ahead of the summit.

European Commission President Ursula von der Leyen and EU Council President Charles Michel on 25 March.

A statementEU leaders said they would focus on “the international community’s commitment to supporting Ukraine, the dramatic humanitarian crisis caused by Russia’s aggression, its destabilizing international order and its inherent global impact.”

China acknowledged the tension in the room, but denied any allegations of wrongdoing.

“The current international situation is volatile,” Wang Wenbin, a spokesman for China’s foreign ministry, told a news conference on Wednesday.

Beijing has already called on the United States which, together with the European Union, imposed a strict sanctions against Moscow, without prejudice to its “legitimate rights and interests”, adding that China and Russia “will continue to cooperate in normal economic trade cooperation.”

China has long sought to forge a wedge between the United States and the European Union, and officials and state media often stress the importance of the bloc’s “strategic autonomy” from Washington.

Despite the pressure, China and the European Union are highly dependent on each other for hundreds of billions of dollars in trade each year.

According to Eurostat, China surpassed the United States as Europe’s largest trading partner in goods, with a total trade value of € 588 billion. EUR 650 billion. Eurostat.

Shipping containers were stacked in Lianyungang port in 2022.  March 31  Lianyungang City, Jiangsu Province China.

2021 The trend continued: total Chinese-EU trade in goods amounted to € 695.5 billion. EUR (approximately USD 777 billion), compared to EUR 631.4 billion € 704 billion in US-EU trade.

According to Eurostat, China was the EU’s first source of imports and the EU’s third largest exporter after the United States and the United Kingdom.

Europe’s trade with the world’s second largest economy has grown over the last decade. 2011-2021 China has recorded one of the highest annual growth rates of EU imports and exports, according to Eurostat. report.

But the European Union still considering The United States is its largest trading partner in terms of trade in services and foreign investment. China ranks second in this respect, followed by the United Kingdom and Switzerland.

Cars, machinery and telecommunications equipment are among the best-selling goods between Europe and China.

In Europe, cars and vehicle parts are the most popular exports, and aviation and electrical equipment are also popular.

Meanwhile, prams, data processing machines, furniture and other household items are among China’s largest sellers to Europe. Many of the products arrive in the Netherlands, where Rotterdam is the largest port in Europe.

The region’s largest exporter to China is Germany, with € 104.7 billion.

However, tensions are currently high due to one specific much smaller EU country: Lithuania.

The European Union sued China at the World Trade Organization in January, accusing Beijing of “discriminatory trade practices” against the Baltic state.

A statement The European Commission said China had begun to “severely restrict or de facto block imports from Lithuania and exports to or associated with Lithuania” when it allowed self-governing Taiwan to open a de facto embassy in its own name in Vilnius.

The movement was furious The Communist leadership of Beijing, which considers Taiwan to be part of its territory even though it never ruled it.

Zhao Lijian, a spokesman for China’s foreign ministry, was asked about it at the time told reporters that “China is complying with WTO rules”.

“The problem between China and Lithuania is political, not economic,” he said.

Janka Oertel, director of the European Council’s foreign affairs program for Asia, said the case was likely to be a top priority for EU leaders on Friday.

“Brussels will have to send a strong signal of unity to deter further attacks, whether implicit or overt,” she said.

Also little hope on the planned revival of the China-EU investment agreement, which was previously postponed due to Beijing sanctions on members of the European Parliament over their position on Xinjiang.

Eurasia Group analysts have said that given the current plethora of problems, this is not yet “starting”.

– The CNN Beijing office, Irene Nasser, Julia Horowitz, James Frater, Martin Goillandeau and Luke McGee contributed to this report.

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