Macron Appeals to Xi for Cooperation Amid Trade Imbalances

French President Emmanuel Macron urged Chinese leader Xi Jinping to enhance cooperation on geopolitics, trade, and environmental issues during his fourth state visit to China on December 4, 2023. Macron’s call comes as the European Union seeks China’s assistance in resolving the ongoing conflict in Ukraine and as Beijing aims to mitigate the impact of tariffs imposed by the United States.

During their meeting at Beijing’s Great Hall of the People, Macron emphasized the need to address what he described as “unsustainable” global trade imbalances. He expressed concern that these imbalances pose risks of financial instability and hinder mutual growth. He stated, “The imbalances we see accumulating today are not sustainable, they carry the risk of triggering a financial crisis and threaten our ability to grow together.” Macron called for the establishment of fairer and stronger trade rules.

Xi responded by underscoring the importance of both nations following their own geopolitical paths. He remarked, “No matter how the external environment changes, our two countries should always demonstrate the independence and strategic vision of major powers.” Despite the high-level discussions, no significant business agreements were finalized during the visit, including a long-anticipated order for 500 Airbus jets, which has been under negotiation for several months.

Trade Relations and Economic Dynamics

Macron’s visit included a large business delegation comprising executives from major French firms such as Airbus, BNP Paribas, Schneider Electric, and Alstom. These companies are keen to secure industrial jobs in France while navigating the complexities of the trade deficit with China, which has been a growing concern. France’s trade balance with China has been significantly affected, with the EU’s goods trade deficit increasing by nearly 60 percent since 2019.

The discussions also touched on the ongoing tensions between the EU and China regarding subsidies in the electric vehicle sector. China is eager to alleviate the trade frictions stemming from the EU’s import tariffs on its electric vehicles. Analysts suggest that Xi’s reluctance to approve the Airbus deal might be tied to broader negotiations with the US, particularly concerning Boeing-related commitments.

Macron reiterated his appeal for China to leverage its influence over Russia to facilitate a ceasefire in Ukraine. He stated, “I hope China will join our call and our efforts to at least reach a ceasefire as soon as possible.” This appeal reflects a consistent European effort to engage China in diplomatic resolutions to global conflicts.

Wider Implications and Future Cooperation

The dynamics of the meeting between Macron and Xi extend beyond immediate trade issues. Macron has expressed concerns regarding China’s restrictions on exports of critical minerals, which have sent ripples through European industries reliant on these resources. The recent threats from Beijing to impose further curbs on rare-earth exports have heightened tensions in sectors such as clean energy and semiconductors.

Macron emphasized the necessity of fostering a trustworthy environment to manage supply chain risks. He remarked, “It is essential to create an environment of trust and to deal with every instability risk in supply chains.” France and China maintain a significant trading relationship, with China being France’s seventh-largest trading partner, importing around USD 35 billion in goods annually.

Overall, the talks between Macron and Xi resulted in the signing of 12 cooperation agreements addressing various sectors, including nuclear energy and biopharmaceuticals, though the financial details remain unspecified. The visit highlights the intricate balance both leaders must maintain as they navigate domestic pressures and international expectations in an increasingly complex global landscape.