European leaders are seeking to end sweeping restrictions imposed by the Biden administration on China, while Chinese President Xi Jinping began his week of foreign tours with efforts to repair relations with the United States, according to Bloomberg.
This shift in sentiment amounts to a victory for Xi on only his second trip outside China since the pandemic began, a period that has seen Beijing's relations with the United States and its allies go from bad to worse.
Last October, President Joe Biden imposed restrictions on the sale of semiconductors and chip-makers to China in an attempt to derail its economic development, and asked key allies to comply, raising fears of a dividing global economy.
Last Friday, French President Emmanuel Macron called for engagement with Beijing and resistance to efforts to divide the world into competing blocs. This followed similar pleas from German Chancellor Olaf Schulz, who visited China earlier this month, and Dutch Prime Minister Mark Rutte's efforts to coordinate with other major chip makers in resisting US pressure.
“Now, gradually, many want to see that there are two systems in this world,” Macron said in a speech to business executives at the Asia-Pacific Economic Cooperation (APEC) summit in Bangkok. This is a huge mistake, even for both the United States and China,” he said, adding, “We need one world order,” an approach that has won wide approval.
These statements by the French president in particular show that Europe is firmly rooted in the quest for common ground when it comes to China. While calls have increased in some European capitals to be tough with Beijing on issues related to human rights and democracy; comprehensive US export controls on chips, which may soon be extended to other strategic technologies, have shifted discussions from concerns about China to concerns about American abuses.
Noah Barkin, managing editor of the Rhodium Group in China, said that with Germany heading into recession and Europe facing a cold winter without cheap Russian oil and gas, “there is a limited appetite for confrontation with Beijing.”
He added, “Despite all the statements about standing up to Xi, forming a common European front and mitigating the risks of economic engagement with China; the procedures that took place during the past month were deficient. The danger, if this continues, lies in more fissures in the transatlantic relationship. We are already seeing some of these cracks in Europe's reaction to recent US restrictions on technology destined for China.”
exploit divisions
Xi sought to exploit divisions on his six-day trip to the G20 summit in Bali and APEC in Thailand, during which he met nearly 20 leaders, many of whom had not seen each other in at least three years. In a meeting with Rutte in Bali; Xi urged the Dutch prime minister to avoid "splitting" as the United States pressures ASML Holding NV, which has a monopoly on the kind of machinery needed to make the most advanced chips.
"We must resist the politicization of economic and trade issues and maintain the stability of the global industrial and supply chain," Xi told Rutte on Tuesday. The Chinese leader also called for increased cooperation in high-tech manufacturing with South Korea, in a meeting with President Yoon Suk-yeol, whose country is home to chip giants Samsung Electronics and SK Hynix.
Later in the week on Thursday, Rutte met Yoon during a visit to Seoul, as the two leaders pledged further cooperation. A day later, Dutch Foreign Trade Minister Lisjy Schrenemacher said the United States should not expect the Netherlands to take for granted the restrictions on Chinese exports.
In an interview with the Dutch newspaper NRC published on Friday, Schrenimacher said: “The Netherlands will not follow the American procedures to the fullest. We conduct our own assessment, and we do so in consultation with partner countries, such as Japan and the United States.”
The summit showed that the world's two largest economies understand their responsibility to overcome divisions, but there are still risks of greater divergence without follow-up in subsequent discussions, according to International Monetary Fund Managing Director Kristalina Georgieva.
“We are in a world that is moving from one shock to another, a pandemic, war, inflation and a cost-of-living crisis,” the Bulgarian economist told Bloomberg on Saturday. If we add to that the fragmentation of the global economy, it would be like pouring gasoline on the fire. Nobody benefits from that situation.”
US measures to restrict trade with China have also been criticized in Asia, with countries such as Singapore warning against isolating Beijing economically. Many governments in the region also viewed the visit of US House Speaker Nancy Pelosi to Taiwan earlier this year as an unnecessary provocation.
Biden appeared to address these concerns after meeting with Xi, telling reporters he did not see "any imminent attempt" by China to invade Taiwan and explaining that US policy toward the autonomous island "has not changed at all." He said Xi was "frank," adding, "I think we understand each other."
Although key European leaders are constantly resisting mounting pressure from Washington; but they are far from reaching a consensus on how to deal with an increasingly assertive China.
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