EU and France tell Xi they need protection from Chinese imports

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Emmanuel Macron and Ursula von der Leyen warned Xi Jinping on Monday that the EU needed to protect itself from cheap Chinese imports and also urged China’s president to curb support for Russia in its war in Ukraine.

“We will defend our companies, we will defend our economies,” von der Leyen, European Commission president, said after meeting Xi in Paris at the start of his first trip to Europe in five years.

“The world cannot absorb China’s surplus production”, von der Leyen said. The EU, she added would “closely co-ordinate” with G7 countries and emerging economies that were impacted by “China’s market distortions”.

Macron, the French president hosting the meeting at the Élysée Palace, told Xi that “the international situation very clearly means we need to have a European-Chinese dialogue more than ever”.

Citing the “need for fair rules for all”, Macron said: “Europe is at a turning point of its history, which requires us to face and overcome structural difficulties.”

Xi’s visit coincides with a wave of EU anti-subsidy investigations into Chinese companies, including a blockbuster one into electric vehicles, an industry that France has also sought to protect by backing homegrown and European manufacturers.

His 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.

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.

Another point of tension is China’s closeness to Russia during the continuing Ukraine war.

Von der Leyen said that the trio “also discussed China’s commitment not to provide any lethal equipment to Russia”, adding that Beijing should put more effort into preventing the delivery of dual-use goods to its northern neighbour “that find their way to the battlefield”.

Xi will dine with Macron and other French ministers and business leaders on Monday evening at the Élysée Palace before visiting the Pyrenees on Tuesday for more personal one-on-one talks.

France has particular issues of its own to raise with the Chinese leader, including the threat to its cognac industry from an anti-dumping investigation launched by Beijing shortly after the EU’s EV probe. It is also seeking greater access to China’s market for French exports such as cosmetics and agricultural goods.

“We welcome more quality French farm products and cosmetics to the Chinese market to meet the ever-growing needs of the Chinese people for a better life,” Xi wrote in a signed article in French newspaper Le Figaro that was reprinted in English by the Communist party mouthpiece People’s Daily.

As he met Macron on Monday, Xi said China and Europe, “as two important powers in this world”, should remain partners and improve their “strategic co-operation”.

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.

European companies operating in China also argue that authorities in the country are increasingly imposing administrative barriers in multiple sectors.

“The investment and trade ties (with China) only make sense if they are balanced,” Jean Lemierre, the 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.”

Cosmetics manufacturers, for example — including big French companies — are concerned that new regulations on everything from animal testing to labelling are either too vague or impractical and are slowing their ability to sell into the Chinese market.

At the same time European countries say they are open to having Chinese operators on their turf as one way of rebalancing ties, as they would have to play by European rules.

“BYD is welcome in France,” French finance minister Bruno Le Maire said after a meeting with French carmakers and suppliers on Monday, referring to the Chinese electric-vehicle manufacturer.

BYD said in December it was planning to build its first EU plant in the Hungarian city of Szeged.

Chinese authorities deny that their industries are in “oversupply” and have called western accusations “hype” aimed at justifying protectionism.

In his signed article, Xi also touted a recent initiative offering visa-free access to tourists from France and other European countries.

He said China had “fully opened up” its manufacturing sector. In return, he said he hoped that Chinese companies entering France could “operate in a fair and equitable business environment”.

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