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CWA # 1313, 16 May 2024
NIAS Europe Studies
China and France: President Xi's visit to Paris showcases Beijing's strategic approach

  Padmashree Anandhan

China and France: President Xi's visit to Paris showcases Beijing's strategic approach 
By Padmashree Anandhan

What happened?
On 06 May, French President Emmanuel Macron welcomed China's President Xi Jinping, marking 60 years of diplomatic relations between China and France. On the first day of the visit, both joined the talks, including European Commission President Ursula Von Der Leyen, who discussed China's "market distortion practises," trade, removing tariffs on Cognac exports and China's efforts to influence Russia on the war in Ukraine. Macron said: "We welcome the Chinese authorities' commitments to refrain from selling any weapons or aid" and to "strictly control." In response, Xi said: "History has repeatedly proven that any conflict can ultimately be resolved only through negotiation." The French and Chinese companies also signed 18 agreements on energy, finance, and transport. Most of them were renewals rather than new commitments. 

During the trilateral meeting on China's practise of dumping underpriced products into the EU, Von der Leyen stressed: "…will not waver from making tough decisions needed to protect its economy and security." 

On 08 May, China's Ministry of Foreign Affairs said, "China is ready to work with France and Europe to enhance people-to-people exchanges and deepen economic and trade cooperation." Xi called China-EU relations the driving force with prospects of development, adoption of a "positive China policy," and a high-level China-EU summit to promote partnership on industrial and supply chains.  

What is the background?
First, France is a key bilateral partner for China in Europe. The relationship between the two began in January 1964 when former French President Charles de Gaulle recognized China, saying, "France simply recognizes the world as it is." However, this did not last; the Chinese leader Mao Zedong introduced a cultural revolution, leading to the exit of French students from China and the stalling of relations for the next ten years. The bilateral relations improved only at the end of the 20th century during Jacques Chirac and Jiang Zemin's leadership. During this period, France moved from establishing a comprehensive partnership with China in 1997 to a "global strategic partnership" in 2004. This formed a way for strategic dialogue on global issues, global economic governance, climate change and regional crisis. France's investment in China through companies and subsidiaries has helped create jobs and long-term partnerships. This has led China to consolidate its industrial cooperation in major civil, nuclear energy, aviation and space sectors. Under the "China-France spirit," improving economic cooperation became France's priority, with a lapse in China's human rights. China is the third-largest source of investment and the seventh-largest trading partner. 

Second, Xi's strategic targeting of Europe through France. Xi's visit may seem economic, but it is strategic, considering the choice of three European countries and meeting President Ursula Von Der Leyen. Germany supersedes France in trade with China, but Xi's decision to meet Macron does not imply to commemorate 60 years of relations but to pitch for entry into the EU. For China, breaking through the "systemic rival" tag of the EU and accessing the European single market is strategic. EU's de-risking strategy aims to push back the trade imbalance, especially against the flooding of electronic vehicles and China's unfair trade practices to protect European businesses. Therefore, improving its EU trade would be a major harbinger for China, which has experienced a three-decade low in foreign direct investment (USD 33 billion). France and Germany are crucial to Beijing's success in this. As of 2023, France accounts for USD 78.9 billion in total bilateral trade. The key sectors of collaboration have been electric vehicles, energy transition, third-party market cooperation on infrastructure and environment protection.

Third, China's aim to strategize the divide within Europe. Macron's France has been emphasizing an independent Europe, has a nuanced position within the West, and is different from other trans-Atlantic partners regarding the region's future and on many issues, from Russia to the Ukraine War. Xi's China understands the above divide and wants to build a closer partnership with France. For Macron, the European agenda and French businesses are at the core of his foreign policy; for China, this suits its Europe strategy.

What does this mean?
First, Xi's tactical visit to France. In the backdrop of geopolitical tensions across Europe and South Asia, Xi's visit comes timely to renew its economic equation by showcasing itself as a valuable partner to the EU and as a qualified middleman to influence Russia. Although Macron strived to reduce the trade imbalance and approach China through the EU lens by stressing the "strategic autonomy" component, the meeting resulted in a positive outcome for China, with China winning and diluting the EU's derisking barriers.

Second, France as China's Europe anchor. Despite many European leaders, such as Germany, Turkey, and Poland, who have ignored including the EU element during bilateral meetings with Chinese representatives, Macron has always managed to accompany an EU official every time to put forward the French objectives along with the European agenda. Fixing the trade imbalance remains the slogan during the trilateral meeting, but the French authorities view it as an opportunity for an alternative as Europe struggles with a stagnant economy from the war. 

Third, the EU’s helplessness. EU’s China Strategy 2023 aims to create a risk assessment for companies heavily reliant on the Chinese market. Although it is early to evaluate the implementation, the war in Ukraine has aggravated the EU’s need for more defence investment, thereby increasing demand for profitable economic partnerships. Trump’s recent warning to down the US defence share to NATO has also furthered Europe’s need to boost its common defence and develop sovereignty. Xi’s visit presents a better opportunity for France and the EU to surface their economies during the war, helping increase their defence investment. The domestic economies of the EU member states benefit from the economic deal, while the EU’s economic sovereignty from China remains defeated.

About the Author

Padmashree Anandhan is a Project Associate at the School of Conflict and Security Studies, NIAS, Bangalore. Her areas of interest include domestic politics and protests movements in Western Europe. She is currently working on a issue brief on expansion of NATO in the Nordic.

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