Xi hosts EU leaders this week amid tiff over Beijing’s trade tricks and war support to Russia

A delegation of leaders from the European Union is set to lead trade talks in China as tensions between the two sides remain palpable over Beijing’s support to Russia in the Ukraine war.

While China is looking to use this summit as an opportunity to highlight its multilateralism and growing relationship with the EU, which will mark its 50th year, the bloc is looking to bring up China’s trade surpluses and alleged supplies of dual-use goods for Moscow’s war.

“China is the key enabler of Russia’s war in Ukraine,” EU’s top diplomat, Kaja Kallas, told the Financial Times ahead of the summit on Thursday.

What’s on the agenda?

European Commission President Ursula von der Leyen and European Council President António Costa are expected to spend considerable time with Xi Jinping during the one-day visit, which will feature a summit and working lunch, followed by a meeting and banquet with Chinese Premier Li Qiang.

The summit comes less than a week after the EU adopted a sweeping new package of sanctions on Russia over the Ukraine war, looking to pile more pressure on the Kremlin by lowering a price cap for Moscow’s oil exports.

And in talks with EU trade chief Maros Sefcovic on Tuesday, the Chinese commerce ministry said Commerce Minister Wang Wentao “made solemn representations regarding the inclusion of two Chinese financial institutions in the EU’s 18th round of sanctions against Russia”.

Why is EU and China clashing?

Kallas listed a number of issues the bloc has flagged to China, including trade imbalances and “economic coercive practices” and dominance in critical raw materials, chemicals and consumer drones.

Meanwhile, Xi declined an invitation to fly down to Brussels, where the summit was meant to be held this year, a move that has not been received positively by the EU.

China’s trade surplus with the EU reached a record high of nearly €400 billion in 2022 and has stayed elevated since then. European officials have accused Chinese manufacturers of flooding their markets with surplus low-cost goods, while European businesses continue to voice frustration over limited access to the world’s second-largest economy.