Editor's Note: Greetings! In light of the summit between the leaders of China and the United States in Los Angeles, Europe is closely attuned to the unfolding dynamics. The interplay between China-U.S., EU-U.S., and China-EU relations is evident. Reports hint at a scheduled China-EU summit on December 7th and 8th. Additionally, on 16th November, President Ursula von der Leyen, in her speech after an eight-month hiatus, provides vital insights into China relations during this crucial moment. Enjoy your read and have a nice weekend!

▶︎ Focus

Understanding China-EU Dynamics: Key Highlights from von der Leyen's Speech

On 16 November local time, European Commission (EC) President von der Leyen delivered a speech entitled "Check against Delivery" at the European Council on Foreign Relations (ECHR). This should be the second time since March this year that she has delivered a speech at a think tank focusing exclusively on China. The similarities between the two speeches are that they were both delivered before her visit to China, but of course the intervals, the length of the speeches, and the core content are all different. The speech in March was much like a "shouting match" with China, when she first floated her "de-risking" strategy towards China, which subsequently caused waves of concern and controversy.

The speech in November regarding China-EU relations is set against a backdrop that is both rich and critical. Firstly, on the other side of the Atlantic, the leaders of China and the United States are currently holding a highly anticipated meeting. Despite recent lows in the relationship between the world's first and second-largest economies, such as the "balloon incident" and "export controls on advanced computing and semiconductors to China," top-level engagements are increasing, fostering dialogue and managing disagreements. This is undoubtedly expected to influence the development of China-EU relations.

Secondly, the EU and the US held a summit in Washington in October, where some persistent tariff disputes were left unresolved. With both the EU and the US facing elections next year, the uncertainties impacting transatlantic relations appear to be heightening the anxiety among the EU policymakers.

Thirdly, this year has witnessed a comprehensive recovery in China-EU interactions. In recent months, numerous EU commissioners have visited China, conducting high-level dialogues on various fronts, including strategy, trade, digital issues, and the environment. Bilateral talks on topics such as the circular economy, water resources, and human rights have also taken place. There has been frequent mutual visits in fields like trade, culture, education, and think tanks. While mutual understanding has deepened, friction and hot-button issues persist. For instance, the EU's initiation of an anti-subsidy investigation into Chinese electric cars has dampened commercial confidence, raising concerns about fairness and justice. This has become a focal point in China-EU economic and trade domain.

Compared to the speech in March, her speech this time was shorter (approximately half the duration of the March speech). However, its core content revolves around economic and trade relations and the "de-risking" policy. The crucial information presented deserves close monitoring and in-depth analysis.

Following is a summary of the main points from President von der Leyen's speech on China-EU relations, provided for reference:

She emphasized the importance of understanding of China. "Getting China right has never been more important than today. China is not the same country as ten years ago. Its economy, its policies and its global footprint have changed. So, getting China right requires first and foremost that we get the facts right. This is why we are investing more and more in our knowledge of China, not only with our Horizon Europe research programme, but also by hiring more China experts within the European institutions. Additionally, we set up a China fellows program in our in-house think tank. Because there can only be dialogue if we understand each other."

She also mentioned that the relationship with China is a determining factor for the EU's future economic prosperity and national security. "With two wars raging just outside our Union's borders – in Ukraine and Gaza. And with an uncertain economic outlook. In these turbulent times, there is strong need for strategic stability in how we deal with China. And for this, we must be honest in assessing how China is evolving. Let me start by looking at China's economic posture, before I move to its diplomatic and military posture.

China's economic trajectory is changing profoundly. The country is heading into a period of slower growth. And economic imbalances in China matter tremendously to us today. China's industrial policy today is not only creating much more competitive industrial players."

She addressed China's export controls on gallium and germanium, stating, "While we do not want to decouple from China, we do need to de-risk parts of our relationship. And we are building our de-risking strategy upon three pillars. First, defense of our legitimate economic interests. Second, dialogue to address our differences. And third, diversification with our partners."

She expressed her intention to defend Europe's indigenous interests and emphasized the need for Europe to strengthen its competitiveness. She also mentioned, "there are great concerns about fairness and security vulnerabilities in the clean tech sector, including, for example, EVs."

She stated, "The EU, we are also ready and willing to address our disagreements through dialogue." She believes that the central theme for the EU at the upcoming summit with China in early December is to "achieve a level playing field in our trade relationship with China."

"We will go to China in good faith," she said. "We must leave space for a discussion on a more ambitious relationship that benefits both sides."

She declares, "we will keep engaging with China on how we can make competition fairer and more disciplined."

Notably, she proposed that "the rivalry does not have to be hostile; It can be constructive," deeming that the response must be balanced and strategic.

In the realm of global cooperation, President von der Leyen deems collaboration with China crucial, spanning various areas such as climate change and carbon emissions trading systems. Furthermore, China and the EU have jointly created the historic Global Biodiversity agreement.

She concluded by stating: "China's ability to influence the world has grown exponentially in the last ten years. We cannot look at China only as a trading partner, or an industrial powerhouse. But also as a technological competitor, a military power, a global player with a distinct and diverging idea of the global order. So, if we want to get China right, we must be able to understand it in all its complexity and intricacy. We must make sense of China's ongoing transformations, if we are to achieve strategic stability in our relationship."

Analysing the speech, it appears that she has tried to downplay the confrontational element of the EU's "systemic rivalry" in its positioning towards China, and said that this relationship can also be "constructive", which may be related to the Chinese side's dissatisfaction with this positioning.

President von der Leyen seems to have made a distinction between "partners, competitors and rivals", i.e. China and the EU are partners in trade, the EU "competes" with China in high-tech and technological development, and the EU is categorised as a more "adversarial" partner in the military or global order. In the military or global order, the EU is categorised as a more confrontational "adversary". On the path towards China, she still insists on the "de-risking" strategy. It will be worthwhile to follow the future analyses and perceptions of the European side on the development of US-China relations and the positioning of China-EU relations.

▶︎ Hot Topics

>>Xi and Biden engage in crucial talks on China-U.S. relations and global challenges

Chinese President Xi Jinping and U.S. President Joe Biden on Wednesday (15th November) had a candid and in-depth exchange of views on strategic and overarching issues critical to the direction of China-U.S. relations and on major issues affecting world peace and development, Xinhua reported.

The meeting was held at Filoli Estate, a country house approximately 40 km south of San Francisco, California. Biden warmly received Xi when he arrived at Filoli Estate.

After the talks, Biden hosted a luncheon for Xi. The two heads of state exchanged views on international and regional issues of common concern, such as the Palestinian-Israeli conflict. Biden also invited Xi to take a walk in the Filoli Estate, and escorted Xi to his car to bid farewell.

"The meeting was positive, comprehensive and constructive, and has charted the course for improving and developing China-U.S.relations. San Francisco should be a new starting point for stabilizing China-U.S.relations," the report said.

 >>EU Commissioner Hoekstra visits China

On 15-17 November, Commissioner Hoekstra will be in Beijing, China, for bilateral climate discussions ahead of the COP28 UN Climate Change Conference, which begins in Dubai in just over two weeks.

 >>China urges EU to correct wrong practice in anti-subsidy probe on Chinese electric vehicles

The recent sampling results released by the European Commission for its ongoing anti-subsidy probe into Chinese electric vehicles are not fair and suspected of violating the rules of the World Trade Organization (WTO) and the laws of the EU, a spokesperson of China's Ministry of Commerce said Thursday.

The sampling practice is discriminatory against Chinese electric vehicle enterprises and will seriously distort the probe results, spokesperson He Yadong told a regular press conference. In the sampling, the commission only selected three local Chinese enterprises as samples in the investigation. It excluded enterprises from the EU member states that lead in terms of production and sales, which is unconventional, and the sampling results can not reflect the objective industrial situations in the EU market, He noted. The sampling standard of the commission is not compliant with relevant rules, the sampling process is not transparent, and the sampling results are unfair, he said.

  >>EU launches anti-dumping investigation against China's titanium dioxide, Mobile Access Equipment

On Monday, the European Commission launched separate anti-dumping investigations into China's titanium dioxide product and mobile access equipment. The EU has so far used the most trade defense instruments towards imports from China.

   >>European Commission lowers EU, eurozone economic growth forecast

The Commission on Wednesday downgraded its forecast for economic growth in both the EU and the eurozone this year to 0.6 percent from the previously projected 0.8 percent. High inflation, though declining from its peak, and tightening monetary policy took a heavier toll than previously expected, alongside weak external demand, it said, adding that the latest business indicators and survey data for October pointed to subdued economic activity also in the fourth quarter of this year, amid increased uncertainty.

 >>IMF Lifts China Growth Forecasts Through 2024 on Stimulus

The International Monetary Fund (IMF) upgraded its projections for China's annual economic growth this year and next as the nation recorded a stronger-than-expected performance in the third quarter and Beijing rolled out policies to support the recovery.

The IMF expects China's gross domestic product to expand 5.4% in 2023 and 4.6% in 2024, according to its Article IV Mission statement published Tuesday. Those are each 0.4 percentage points higher than the Fund's prior projections in October.

 >>MOFCOM calls on EU to provide fair environment for trade cooperation

Ministry of Commerce of the People's Republic of China (MOFCOM) has called on the EU to provide a fair, just and non-discriminatory environment for China-EU trade cooperation. The remarks were made by Minister of Commerce Wang Wentao during a meeting with the EU's industry chief Thierry Breton on November 10, when two sides exchanged views on China-EU economic and trade relations and cooperation on electric vehicles, 5G and supply chains, according to media reports.

▶︎ What are experts talking about？

Resetting the Ballast Stone, Stabilizing China-US Relations

Author: He Weiwen

Source: China-US Focus

In recent months, high-level interactions between China and the US have increased rapidly, showing a cautious optimism about the stability of the bilateral relationship that is vital to the whole world.

US Commerce Secretary Raimondo's four-day visit to China at the end of August launched a dialogue mechanism on key issues of bilateral trade and investment, including an annual meeting between the two commerce ministers, a working group on specific business issues and an information working group on export controls, and biannual meetings at the deputy ministerial or bureau level. Raimondo described her four-day trip to China as "very successful and fruitful" and said that the US and China have a huge and important economic relationship that benefits the China, the US and the world. Soon after, the two sides announced the establishment of a joint economic working group and a joint financial working group. The first financial working group meeting was held on October 13, attended by China's central bank governor Pan Gongsheng and US Treasury Secretary Yellen.

The most significant development was the visit to China from October 7 to 9 by a bipartisan delegation of senators led by US Senate Majority Leader Schumer. President Xi met with Senator Schumer and his delegation. Schumer said that China's development and prosperity benefits the American people. The US does not seek conflict with China, nor does it seek to decouple from China.

Brace Yourself: How The 2024 US Presidential Election Could Affect Europe

Author: Célia Belin Majda Ruge Jeremy Shapiro

Source: European Council on Foreign Relations

A profound debate is taking place among US political parties about America's future foreign policy orientation. Democrats and Republicans are aligned on some issues, such as the strategic rivalry with China, protecting domestic manufacturing, and access to strategic technologies. But the parties also disagree on subjects of crucial importance to Europeans such as climate action, the war in Ukraine, and the United States' relationship with its allies.

On America's global posture and military presence abroad, the parties are split between those who believe in limited international US engagement, others who argue for prioritising the Indo-Pacific, and advocates of continued US global leadership or even primacy. Europeans must not simply hope they can accommodate potentially dramatic shifts in the US policy in the coming years, but should instead take steps now to enhance and protect their own position in the world.

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.

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