A surprising journey

Commission chief von der Leyen will join French President Macron in visiting China

Editor's Note: On Friday afternoon, many were taken aback as the spokesman for European Commission President von der Leyen announced that she would be embarking on a visit to China with French President Macron. The news was confirmed by Mr. Macron himself after a summit in Brussels. As always, our CCCEU Weekly Update is here to keep you informed about the latest developments in China-EU relations. Enjoy your reading and have a lovely weekend!

VDL's first China trip as commission chief

European Commission President von der Leyen will travel to China with French President Emmanuel Macron in early April, the president's chief spokesperson Eric Mamertweeted on Friday afternoon.

She will give a speech to the Mercator Institute for China Studies (MERICS) and the European Policy Centre on EU-China relations on March 30 and then travel to China with French President Emmanuel Macron the following week, the spokesman noted.

The announcement surprised many as China and the EU are reportedly preparing a June summit in Beijing that will be jointly attended by von der Leyen and European Council President Michel.

French President Macron confirmed that he had "suggested to von der Leyen that she accompany him to China" on April 4 so they could speak "with a unified voice" during a press conference after the  two-day EU summit in Brussels, according to Politico.

In addition to von der Leyen and Macron's upcoming trip, Spanish Prime Minister Pedro Sánchez said during the summit that he will also visit China soon.

It is widely believed that the Russia-Ukraine conflict will top the agenda of EU leaders' China trips.

To reduce reliance on China's raw materials?

Brussels seeks to cut its dependence on China with regard to its ongoing green transition, which becomes urgent due to the bloc's decoupling from Russia's fossil fuels.

Last week, the European Commission unveiled its critical raw materials act, saying that China dominates several key products including magnesium, natural graphite, light rare earths, and heavy rare earths and thus poses a strategic "risk."

Beijing also enjoys advantages in processing, the commission said. For instance, with only around 9% of the world's lithium is mined in China, about 60% of lithium is processed in the country.

The act proposed measures to revive its all but lost industry in raw materials, including for select "strategic projects," which can enjoy a shorter permitting process and easier financial support.

The commission is also eyeing other trade partners in a bid to reduce China's overwhelming share of its strategic imports.

However, the act was accused by many in Europe as "too ambitious" but "unrealistic", as many key strategic goals remain non-binding and the EU's complex rules on environment, waste, and recycling are set to take a toll.

Eurozone inflation hit 8.5% in February

The euro area's annual inflation rate was 8.5% in February 2023, down from 8.6% in January. A year earlier, the rate was 5.9%. European Union annual inflation was 9.9% in February 2023, down from 10.0% in January. A year earlier, the rate was 6.2%. These figures are published by Eurostat, the statistical office of the European Union.

EU strikes 'ground-breaking' deal to cut maritime emissions

The European Parliament and EU ministers struck a deal in the early hours of Thursday morning (23 March) on the bloc's flagship law to cut emissions in the maritime sector, marking a major step forward for the bloc's plans to reach carbon neutrality by 2050.

Fed stays course with 25 bps rate hike

According to CNBC, the Federal Reserve announced another 25 basis point interest rate hike on Wednesday, making the benchmark rate the highest it's been since 2007.

The ninth consecutive rate hike is meant to discourage inflation by increasing the cost of borrowing, which can slow the economy and possibly trigger a recession. In turn, it increases the growing cost of credit cards, auto financing and loans.  

Swedish parliament approves NATO membership

According to euractiv, lawmakers in the Riksdag voted largely in favour of Sweden joining NATO despite Green and far-left opposition on Wednesday, with Foreign Minister Tobias Billström now saying he expects his country to officially join in July.

Beijing rebukes Washington's specific provisions of semiconductor law 

On March 22, Chinese Foreign Ministry spokesperson Wang Wenbin told a regular press conference that the proposed "guardrails" for the CHIPS Act issued by the US Commerce Department on March 21 are "sci-tech blockade measures and protectionist in nature."

"The US has overstretched the concept of national security, abused export control measures, and even coerced some of its allies to block and contain China and attempt to fragment the industrial chains at the latter's expense," Wang noted.

What are experts talking about?

"Net-Zero Industry Act : "Protecting" Climate or "Protectionism?" by Zhang Dongfang. The article mentions that the EU's draft Net-Zero Industry Act, published on March 16, is not only a response to the US Inflation Reduction Act, but also a "declaration" to join the global green industry subsidy race. The article summarises the various views and points out that the Net-Zero Industry Act is, in the final analysis, a law to massively increase Europe's ability to produce its own net zero technology and to ensure the security of supply of net zero technology.

"The Net-Zero Industry Act puts EU credibility at risk," published by Bruegal; the author is Grégory Claeys. The article mentions, the European Commission's proposed Net-Zero Industry Act (NZIA), published 16 March 2023, aims to scale up clean-tech manufacturing in the European Union, as part of the broader Green Deal Industrial Plan to respond to the US Inflation Reduction Act (IRA). The author believes that various problematic aspects of the NZIA have already been pointed out. For instance, the idea of allowing authorities to override regulations to accelerate strategic projects is inefficient. Either these regulations are legitimate and effective, in which case strategic projects should not be exempted, or they are harmful, in which case they should be revised, not only for strategic projects but more generally, or even scrapped.

Please note: the English version of this issue is slightly different from our Chinese one. The views and opinions expressed in this article do not necessarily reflect the official position of the CCCEU.