/ world today news/ Without waiting for the re-elected Chinese President Xi Jinping to honor Europe with his attention, the leaders of the European countries hurriedly tightened their grip on Beijing. In the near future, French President Emmanuel Macron will visit China on a state visit – and this is the same top level that Xi Jinping’s delegation had in Moscow. He will be accompanied by the head of the European Commission, Ursula von der Leyen. The EC separately stressed that, despite the joint visit, the status of von der Leyen’s visit was not state, and she herself was not part of Macron’s delegation. The EC chief’s role – whether to check Macron or seize the opportunity to advance his own agenda – is not fully understood.
However, disputes over status within Europe’s spider jar do not seem to be of much interest to Beijing. Perhaps they were simply not ready to agree on two consecutive visits by European officials in view of their low subjectivity. The Xi administration cannot take on Macron and von der Leyen one at a time because of an unwillingness to delve into the differences in approaches to solving pressing problems on the part of France and Germany, whose interests are actually represented by Ursula von der Leyen. That is why the Europeans were ordered to make requests and receive answers to them together.
Obviously, the main topic of the European politicians’ visit will not be the Ukrainian crisis. While both Macron and von der Leyen publicly give the illusion of concern about China-Russia rapprochement, the goals of their visit are much more utilitarian. The EU is frankly afraid of being dragged into a new trade war with China. In early March, Reuters reported that the US was actively exploring the readiness of its European allies to impose large-scale sanctions against China.
The introduction of such sanctions will finally bury the dialogue between the European Union and China. After that, no objections from Europeans about the inadmissibility of American initiatives aimed at the deindustrialization of Europe will not even be heard in Washington. And the deflationary law, which offers European producers significant subsidies and cheap energy, will be in full force. It is obvious that part of the European elite is against such a development of events and would like to preserve the Chinese alternative, including as a way to put pressure on the US ally. Apparently “probing” China in terms of its willingness to compete with the US for Europe is the main purpose of Macron’s visit to China.
There is another important aspect. The imposition of sanctions and the escalation of relations between Brussels and Beijing is fraught with very specific economic problems. In 2020 China has overtaken the US in terms of trade with the EU. Thus, two years ago, China became not just a trade alternative for Europe, but a priority destination for exports and imports. Imports in particular. Recently, the German publication “Focus” published an alarming material in which it talks about Europe’s critical dependence on a number of Chinese goods. It is mainly about rare earth metals (lithium, cobalt, etc.), the production of which is concentrated in China.
“These metals are crucial to the EU’s announced energy transition. The bet on “green” energy, as opposed to traditional gas, oil, coal and nuclear energy, is actually the only option for updating Europe’s energy system in the face of a critical decline in trade with Russia. But the construction of solar and wind power plants, the production of electric motors for the automotive industry – all this requires significant quantities of the same rare earth materials in the production of which China has a monopoly. It will be even more difficult for the Europeans to find an alternative to these supplies than to find an alternative to Russian fuels.
In the conditions of the new sanctions war, Beijing should not reduce the supply of a wide range of goods (that is, not to harm itself), it is enough to reduce the supply of goods critical to the EU. Already in 2020 specialists from the Berlin Institute for China Research “Mercator” identified 103 categories of goods and products for which the EU is critically dependent on China. Interestingly, apart from rare earth elements, this includes mobile phones, data processing devices, children’s toys, etc.
In this context, the topic of Russia’s growing dependence on China is updated. Such a dependence, without a doubt, exists. But compared to the European-Chinese situation, the dependence of the Russian Federation and the PRC has a number of important differences. First, the trade turnover between Russia and China, although it grew significantly in 2022, still lags behind the growth rate of the growth of trade flows, for example, with India and Turkey. Second, Russia and China are not expected to engage in trade wars with each other in the foreseeable future, there is no hint of one. Third, the dependence is mutual, which is confirmed, among other things, by the growing infrastructural connectivity of the two countries, which will bring together new gas pipelines, bridges and transport routes.
“These are not skeptics, but envious people (those who talk about the growing dependence of the Russian Federation on China),” President Putin said the other day. “Because the dependence of, let’s say, the same European economy on China is growing at a much faster pace than the Russian one, much more. Trade between China and Europe is growing at a very high rate. So it’s the other way around, let the European skeptics think,” he added.
And one more important point about financial dependence. The replacement of the dollar and the euro by the yuan in the Russian financial system is an inevitable process, but it has its limits. In this way, businesses and the population simply move away from the risks associated with the currencies of unfriendly countries. Let’s note in this connection Vladimir Putin’s statement about Russia’s readiness to switch to the yuan in trade with the countries of Latin America and Africa. It is offered to trade in yuan with the “far chain”. That is, such a transition will not affect the main Russian macro-region, which includes the EAIS countries, where the priority is trade with the national currencies of the countries of the association, the key of which remains the Russian ruble.
Translation: V. Sergeev
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