Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Emmanuel Macron and Ursula von der Leyen warned Xi Jinping on Monday that the EU needed to protect itself from cheap Chinese imports in order to rebalance trade ties, and urged China’s president to curb support for Russia in its war in Ukraine.
In a day of talks in Paris, French president Macron hailed some advances in commercial discussions with China, including Xi’s “open attitude” over France’s cognac industry that won a temporary reprieve from the threat of Chinese tariffs.
Xi also joined calls for a worldwide truce during the Olympic Games in Paris this summer and urged Russia and Ukraine to engage in dialogue, though underscored that Beijing had nothing to do with the war.
But European leaders still maintained some of their more assertive demands on trade. Von der Leyen warned of market distortions caused by China’s “surplus production”, as the EU is leading a series of anti-subsidy investigations into Chinese companies.
“We will defend our companies, we will defend our economies,” the European Commission president said after meeting Xi in Paris at the start of his first trip to Europe in five years.
“Europe is the continent today with the most open market . . . we want to be capable of protecting our interests,” Macron said later in a joint appearance with Xi.
The EU’s most eye-catching investigation so far has been into electric vehicles, an industry France has also sought to protect by backing homegrown and European manufacturers.
In what has been widely seen as a retaliation, Beijing had launched an anti-dumping investigation into brandy. Macron — who gave Xi high-end cognacs made by French luxury powerhouse LVMH and producer Rémy Martin on welcoming him to the Élysée Palace — thanked Xi for the “provisional measures” on cognac.
A French diplomatic adviser said these entailed holding off on tariffs at least until China’s probe was concluded.
Xi’s top goal during a six-day visit to Europe that will also take in Serbia and Hungary is to limit the damage from trade tensions, Chinese officials say.
On Monday the Chinese president called the exchanges “fruitful” and spoke of deepening co-operation with France in areas such as agriculture, finance, nuclear power programmes and aerospace. French and Chinese companies signed several co-operation agreements, including metro construction contracts for France’s Alstom, but no big orders.
On the diplomatic front, Macron said he also welcomed a pledge underscored by Xi to “refrain from selling any weapons (to Russia), all aid to Moscow and to strictly control exports of dual-use goods” that can be used for military purposes.
Xi limited himself in public comments to urging talks between Russia and Ukraine, and said Beijing was not at the origin of the crisis.
“We’re opposed to this crisis being used to throw responsibilities on to a third-party country, and used as incitement for a new cold war,” Xi told reporters, speaking through an interpreter.
“The world today is far from being calm,” he added as he joined Macron’s call for a global truce during the Olympic Games. He and Macron also called for a ceasefire in Gaza.
Xi dined with Macron and other French ministers under the chandeliers of the Élysée Palace on Monday evening, with business leaders in attendance too, from LVMH’s Bernard Arnault to the head of carmaker Stellantis, Carlos Tavares.
The Chinese president will visit the Pyrenees on Tuesday for more personal one-on-one talks with Macron, an area where the French president used to holiday as a child.
German chancellor Olaf Scholz returned from a trip to Beijing last month during which he also called for fair competition, though Berlin has been less pushy on protectionist measures as its companies have a strong Chinese presence. Scholz, who dined with Macron in Paris last week, did not join his French counterpart on Monday.
Xi also appeared to make overtures to other sectors French exporters are keen to promote in China, such as cosmetics. Cosmetics manufacturers — including big French companies — are concerned that vague or impractical new regulations on everything from animal testing to labelling are slowing their ability to sell to the Chinese market.
The EU’s investigations into Chinese products were triggered by fears that industrial overcapacity in China could lead to electric vehicles, batteries, solar panels and other green energy-related goods flooding the bloc’s markets.
“The investment and trade ties (with China) only make sense if they are balanced,” Jean Lemierre, chair of French bank BNP Paribas, which is expanding in China, told a Franco-Chinese economic conference on Monday on the sidelines of the state visit.
“We’ve shared (the government’s) concerns about this for some time . . . we need to talk frankly.”
Chinese authorities deny that their industries are in “oversupply” and have called western accusations “hype” aimed at justifying protectionism.
Economists have said that China needs to attract more foreign investment to shore up its economy, which is suffering from a years-long slowdown in the property sector and lagging consumer demand.
Additional reporting by Wenjie Ding in Beijing, Paola Tamma in Brussels and Adrienne Klasa in Paris
