What’s Xi Jinping doing in Europe? His goal is more strategic than economic

India should aim to get European investments that are clearly no longer going to China. That is where the dots of its efforts to save Asia from China’s dominance converge at its most basic.

France's Macron meets China's Xi at the Elysee Palace in Paris (Photo credit/Reuters)

In 1964, when French President Charles De Gaulle visited Beijing to formalise the West’s first diplomatic ties with China, he made a profound statement about Parisian weltanschauung – “France simply recognises the world as it is.”

Decades later, and amid waves of geopolitical turbulence, Chinese President Xi Jinping has embarked on his first visit to Europe in five years since 2019, cherry-picking three countries – France, Serbia and Hungary. At the outset, the selection seems emphatically aimed at driving wedges in the Western alliance. It also confirms that the objective of his visit is not economic but strategic. He chose Paris because it conveniently coincided with marking 60 years of China-France diplomatic relations. That said, the real reason was to appeal to Paris’ strategic autonomy at a time when the European bloc has undertaken an uneven but ambitious project to de-risk its grossly imbalanced trade with China. This includes addressing the burning issue of Chinese EVs flooding the European market, outperforming their European counterparts due to unfair trade practices.

The other two countries that Xi visited were Serbia and Hungary.

What’s Xi’s objective?

Xi’s strategic signalling is basic. In the case of France, he wishes to capitalise on the country’s strategic autonomy – which is most susceptible to being misread due to Macron’s mixed statements – to distance it from the United States and NATO. Although there is no real evidence to suggest so, Macron’s outlandish statements are enough to create and sustain this confusion.

Xi’s Serbia visit coincided with the 25^th anniversary of the bombing of the Chinese embassy in Belgrade; an incident that had occurred during NATO intervention in the bloody breakdown of the former Yugoslavia in May 1999.

Serbia is witnessing the unending war that has engulfed core supporter Russia and is looking at European Union accession afresh. In a strategic shift, it has inked a deal on French Rafale jets in its largest military procurement in history. Despite the winds of change, Serbia remains a Russia supporter and mistrustful of the Western bloc.

However, Xi has spent the greatest amount of time in Hungary saying the two countries will enjoy a “golden voyage ” in relations. Budapest remains the most Eurosceptic in the European bloc, maintaining close ties with Russia and China.

China’s influence ops, espionage, interference

On a strategic level, with increasing demand from Brussels to stop China’s support to Russia in its unending war with Ukraine, there is also growing unease in mainland Europe due to instances involving Chinese espionage. Just a day after German Chancellor Olaf Scholz concluded his recent visit to Beijing, three Germans were arrested on the charges of spying for China.

In France, too, there have been instances of how China leverages its growing influence through information ops in Europe. It was the main theme of a recently commissioned study by the Institute for Strategic Research (IRSEM), the official think tank of the French armed forces. In 2022, IRSEM’s then-director, Jean Baptiste, had shared its findings with India’s strategic community at the Manohar Parrikar Institute of Defence Studies and Analyses. The report was meant to be one of the most ambitious and systematic inquiries of how China’s influence ops operate in Europe and enable interference by the Chinese Communist Party.

Paris understands that it has limited leverage against Beijing and must align its China policy with the larger European approach. His scintillating statements aside, Macron’s collective approach in his encounters with Xi has been rather consistent, ensuring alignment with the European framework. When Xi visited Europe in 2019, Macron received him along with former EU Commission president and German Chancellor Angela Merkel. After the event, a joint, not bilateral, statement, was released.

Later that year, when Macron decided to visit Shanghai, he was accompanied by trade chiefs from the EU and Germany. In 2023, European Commission chief Ursula Von der Leyen accompanied Macron during his state visit to China, ensuring that the discussions with Xi operated in a trilateral format.

This fine print reading tends to get misread in New Delhi where the majority buy Macron’s strategic autonomy at face value, missing inherent pragmatism.

It is Berlin that has mostly gone solo in its overtures to China. The flamboyant Macron, despite controversial statements asserting an independent view, has been consistently ensuring that the larger European framework prevails when it comes to China. 

This very observation shows an inherent vulnerability too. From Xi’s perspective, there is little value in France signalling to go with the EU and Germany. Not unless it is reciprocated by other major drivers of the European project such as Berlin, whose economy is far too entwined with Beijing than Paris’. This situation oozes a noticeable mismatch in the prime drivers of the European project in their vision for Europe.

Economic cooperation agreements

For the record, France and China have signed trade agreements but as French Institute of International Relations (IFRI) director Marc Julienne noted in his essay, the golden age of major contracts in aeronautics, civil nuclear and automotive sectors is a bygone era. What perpetuated in terms of trade agreements was an appeal from Paris to rev up its exports to China so that some portion of the existing 40 billion-plus euros trade deficit is lowered.

France was the first to demand EU-level action against Chinese carmakers. It pushed the EU to launch a fresh anti-subsidy investigation in the EV sector apart from the ongoing ones in the solar industry where cheap Chinese imports had ruined the European photovoltaic manufacturers in 2010. This pattern is being repeated in 2024 as heavily and strategically subsidised solar panel makers are once again flooding European markets, pushing local ones out of business.

China has responded with an interesting mix of defiance and deftness. It has carried on with strategic subsidies and has launched a retaliatory investigation into the subsidies for the European Brandy industry. For the uninitiated, it is Beijing’s way of getting even with Paris because more than 95 per cent of brandies exported to China are French. However, China maintains it has nothing to do with punishing France even when the writing on the wall is clear.

In her insightful article, IFRI’s  Japan Research head, Celine Pajon, raises the dissonance in Europe’s attitude toward two Asian giants. While China walks away with all the public diplomacy attention, it is Japan that deserves it. PM Fumio Kishida was recently in France and secured agreements on supply chains for critical minerals and launched negotiations for a reciprocal access agreement to facilitate joint military training and exercises.

While the EU- China trade deal is hanging mid-air, Europe and Japan have one of the most comprehensive and ambitious Free Trade Agreements in the world. Japan is also the only country in Asia to have sent $12 billion worth of assistance to Ukraine, doing more than many of the European countries put together. Kishida has also been a staunch adherent of indivisible security from Europe to Asia, a core European pitch to engage the Indo-Pacific. However, Japan remains low-key and China hogs the limelight.

For India, the only credible sense of the European cacophony on China and de-risking should translate into harnessing the potential of China plus one diversification. While China and Europe remain entangled in their own competing and contesting visions of trade and security, India should focus on leveraging its upswing in relations with the West. It must remain mindful of the transformations underway in the bloc today.

While events could impede or accelerate the pace, the larger direction is tending toward striving for economic, technological and military security through trusted global partnerships. For now, New Delhi should aim to get European investments that are clearly no longer going to China. That is where the dots of India’s efforts to save Asia from China’s dominance converge at its most basic.

The writer is an Associate Fellow, Europe and Eurasia Center, at the Manohar Parrikar Institute for Defence Studies and Analyses. She tweets @swasrao. Views are personal.

(Edited by Zoya Bhatti)