President Xi Visits Europe to Bolster China’s Trade, Image

China’s President Xi Jinping has recently travelled on state visits to Italy, Monaco. and France. In Italy, Xi and Italian Prime Minister signed a Memorandum of Understanding (MOU) ensuring Italy’s participation in China’s Belt and Road Initiative (BRI). Twenty-nine additional agreements were signed, notably two port management deals between China Communication Construction and the ports of Trieste and Genoa. In France, Xi met with President Emanuel Macron, German Chancellor, Angela Merkel, and President of the European Union’s Commission, Jean-Claude Juncker. China and France signed deals worth of C$60.3 million (40 million euros), including a C$45.2-million (30 million euro) pact to purchase French Airbus planes.

Italy’s participation in the BRI marks a major political development. It is the first EU founding member and G7 country to join the BRI. It is also significant because Italy has done so in spite of open U.S. disapproval of the move and, according to Italian diplomatic sources, behind-the-scenes German pressure to avoid BRI participation. But, as the South China Morning Post suggests in a recent article, Italy’s ongoing economic recession was a major factor in motivating the government to defy both the U.S. and Germany.

The summit in France took place as the EU ramps up efforts to recalibrate its relations with China. Amid a decline in Chinese inward investment in Europe and US President Trump’s trade wars, Europe seeks to deepen trade relations with China and also engage China in an effort to oppose increasing protectionism. Meanwhile, on the security front, the EU is subject to U.S. pressure to ban Huawei. The EU is also dissatisfied with China’s ‘unfair’ trade practices. On March 12, the EU Commission unveiled the EU-China: A Strategic Outlook, in which the EU demands China rectify trade distortions, such as its practices of price dumping, state-owned enterprise subsidies, and curtailment of foreign access to government-sponsored procurement in China. 

From the Chinese perspective, the purpose of Xi’s recent tour is to allay concerns over China’s growing power and influence in Europe. As Europe is China’s largest trading partner, Xi needed to leverage the visit to maintain stable relations with Europe amid both Trump’s trade wars and the Huawei affair. So far, Xi’s efforts have been moderately successful. As Jean-Claude Juncker quipped, Sino-EU relations are, “good, but not excellent.”