China’s envoy warns the EU of the “risk” of following the US on trade restrictions

A senior Chinese diplomat said that Europe should reject Washington’s demands to curb trade with Beijing, warning that any country that severed trade relations with his country would do so “at its own risk.”

Fu Cong, China’s ambassador to the European Union, has claimed that the US will “stop at nothing” to disrupt normal relations between the bloc and China, adding that a “protectionist trend” is growing in Europe.

“Who in their right mind would give up such a large booming market as China?” Fu told the Financial Times, warning European politicians not to undermine positive business sentiment toward China. “It will only be at their own risk.”

The ambassador singled out the Netherlands for “caving in to US pressure” by announcing restrictions on exports to China of cutting-edge semiconductor manufacturing technology this year. He hinted that Beijing might retaliate, depending on the extent of the controls.

“We hope European governments and European politicians can see where their interests lie and then resist undue pressure from the United States,” Fu said, urging the EU to continue its pursuit of “strategic autonomy.”

Referring to the Netherlands, he added: “They need to recognize the fact that China cannot just sit there and see its own interests trampled on like this without taking any actions in response.”

European Commission President Ursula von der Leyen: A strong European-Chinese policy depends on strong coordination. . . And prepare to avoid divide-and-conquer tactics © Valeria Mongelli / AFP / Getty Images

Fu was speaking on the same day that Ursula von der Leyen, the president of the European Commission, pledged to tighten scrutiny of trade and investment flows in sensitive technological areas such as quantum computing and artificial intelligence.

Von der Leyen said in a speech that Brussels should develop “new defense tools” as it updates its security policies in the face of an increasingly assertive China. A strong Sino-European policy depends on strong coordination. . . And being prepared to avoid the divide-and-conquer tactics we know we may encounter.”

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The United States has stepped up efforts to persuade allies to toughen their approach to China, as relations between the two economic superpowers have been strained by Taiwan and Beijing’s support for Russia. Von der Leyen seeks to steer a distinct line on the United States, asserting that its goal is not “decoupling” from China but rather “de-risking.”

Trade relations between China and some European countries remain strong. German companies invested a record 11.5 billion euros in China last year, according to a paper published Wednesday by German research institute Institut der deutschen Wirtschaft.

Recent EU proposals to reduce dependence on Chinese imports include improving supplies of critical raw materials and boosting domestic production of green technology. New trade defense tools also enable the EU to retaliate against economic intimidation and limit access for state-backed Chinese firms or producers who use forced labour.

“Many of the measures actually violate WTO rules,” Fu said, noting that Beijing will file a formal complaint with the Geneva-based body.

The United States and its allies accuse China of harming the global trading system through the use of massive industrial subsidies, restrictions on inward investment and violations of intellectual property protection.

Ratification of the EU-China investment deal in 2021 stalled after Beijing imposed sanctions on members of the European Parliament. Fu said he hoped the EU leadership would have “enough courage and political strength as well” to give final approval to the deal.

Asked if China would lift sanctions to open the process, he said Beijing was open to “all solutions, as long as they are based on reciprocity and equality.”

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The ambassador said it was a mistake for the EU to allow the Ukrainian war to dictate its relations with China.

“I don’t think it’s a rational approach to link the relationship with China to the Ukrainian crisis only,” he said, adding that Russia’s “legitimate security interests” must be respected: “It’s not black and white like some people think it is.”

But he stressed that there was “room for negotiation and even for China and the European Union to join hands in promoting peace.”

He added that there was “no possibility” regarding a possible phone call or meeting between Chinese President Xi Jinping and Ukrainian President Volodymyr Zelensky, noting that senior Chinese officials have been in contact with their Ukrainian counterparts.

Additional reporting by Patricia Nilsson in Frankfurt

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