By Liz Lee, Laurie Chen and Xiuhao Chen
BEIJING (Reuters) -Chinese President Xi Jinping urged top European Union officials on Thursday to “properly handle differences and frictions” as he criticised Brussels’s recent trade actions against Beijing at a tense summit dominated by concerns on trade and the Ukraine war.
Expectations were low for the summit in the Chinese capital marking 50 years of diplomatic ties after weeks of escalating tension and wrangling over its format, with the duration abruptly halved to a single day at Beijing’s request.
“The current challenges facing Europe do not come from China,” Xi told visiting European Commission President Ursula von der Leyen and European Council President Antonio Costa, state news agency Xinhua said.
He urged the EU to “adhere to open cooperation and properly handle differences and frictions”, after von der Leyen earlier called for a rebalancing of trade ties with the world’s second largest economy, saying relations were at an “inflection point”.
“Improving competitiveness cannot rely on ‘building walls and fortresses’, Xi added, according to Xinhua. “‘Decoupling and breaking chains’ will only result in isolation.”
“It is hoped that the European side will keep the trade and investment market open and refrain from using restrictive economic and trade tools,” Xi said.
During the meeting in Beijing’s Great Hall of the People, von der Leyen told Xi, “As our cooperation has deepened, so have imbalances,” according to a pool report.
“We have reached an inflection point,” she added, urging China to “come forward with real solutions”.
She was referring to the EU’s trade deficit with China, which ballooned to a historic 305.8 billion euros ($360 billion) last year.
EU trade actions in the past year have targeted Chinese exports of EVs among other goods, and its officials have repeatedly complained about Chinese industrial overcapacity.
In a further veiled criticism of Brussels’ recent hawkish stance on China, Xi also warned EU leaders to “make correct strategic choices”.
The two EU officials are set to meet Chinese Premier Li Qiang later. Both sides hope to reach a modest joint statement on climate, now one of the rare bright spots in their cooperation.
At the start of U.S. President Donald Trump’s second term, both sides had more of a consensus in working together to tackle trade challenges from the United States, said Cui Hongjian, a foreign policy professor at Beijing Foreign Studies University.
“Recently the situation has changed,” Cui said. “The EU has continued to compromise with the United States, which means that there is currently a lack of impetus for EU-China ties to become closer.”
The run-up to the summit saw tit-for-tat trade disputes and hawkish European rhetoric, such as a July 8 accusation by von der Leyen that China was flooding global markets as a result of its overcapacity and “enabling Russia’s war economy”.
In a posting on X on Thursday, however, von der Leyen struck a more conciliatory tone, describing the summit as an opportunity to “both advance and rebalance our relationship”.
Topics the Europeans are expected to raise in the talks are electric vehicles and China’s rare earth export controls that disrupted supply chains worldwide, causing temporary stoppages in European automotive production lines in May.
But China’s exports of rare earth magnets to the EU surged in June by 245% from May, to stand at 1,364 metric tons, though that was still 35% lower than the year-earlier figure, customs data showed.
The EU is likely to seal a trade deal with the United States for a broad tariff of 15% on its exports after intense negotiations, avoiding a harsher 30% figure threatened by President Donald Trump.
($1=0.8492 euros)
(Reporting by Liz Lee, Xiuhao Chen and Laurie Chen; Additional reporting by Amy Lv; Editing by Saad Sayeed and Clarence Fernandez)
