Fracturing Transatlantic Convergence, One Capital at a Time

Executive Summary:

• In the wake of U.S.–China trade talks in Geneva, Beijing launched a sequenced campaign across Europe—first signaling partnership, then reinforcing its trade credentials through multilateral forums, and finally engaging in targeted bilateral diplomacy. The aim was to present the People’s Republic of China (PRC) as a stabilizing force while preempting coordinated action from the European Union (EU) by shaping national responses before regulatory momentum could build.
• This approach capitalizes on structural differences among European states to delay collective decisions. By engaging France, Germany, Poland, Denmark, and the Netherlands on their own terms, Beijing worked to fragment consensus, stall enforcement on trade and tech, and position itself as a pragmatic partner rather than a systemic challenger.
• Even as U.S.–EU coordination slowly advances, Beijing sees continued opportunity in Europe’s internal divergence. As long as member states remain divided in their economic dependencies and policy instincts, the PRC will use bilateral engagement to paralyze EU deliberation and slow the convergence of transatlantic trade strategy.

Beijing is seeking to shape outcomes in Europe by avoiding direct confrontation with the European Union (EU) and instead driving wedges between member states through a calibrated campaign of bilateral diplomacy.  Its latest push followed directly from the May 6–11 trade talks with the United States in Geneva (MOFCOM, May 12). Rather than treating those negotiations as a discrete effort at de-escalation, the People’s Republic of China (PRC) used them as a launch point for a broader strategy: loosen Europe’s alignment with Washington and capitalize on emerging gaps through state-to-state engagement. A central objective was to prevent the spread of U.S.-style trade measures—especially subsidy scrutiny, market access restrictions, and enforcement actions targeting Chinese firms—by engaging European governments before regulatory momentum could take hold. [1] The rollout began with appeals to partnership, followed by selective multilateral outreach to bolster China’s image as a stable economic actor, and culminated in a dense round of bilateral activity aimed at shaping national responses and slowing collective action.

The campaign began with messaging. In the run-up to Geneva, Party media struck a deliberately moderate tone, casting the PRC as a defender of global trade norms and describing Europe as a “highly complementary” (高度互补) and “closely intertwined” (紧密交融) economic partner—not a rival (Economic Daily, May 2). This was followed by behind-the-scenes multilateral engagement: PRC officials met with Swiss and WTO counterparts and convened a working-level dialogue with EU financial regulators, all while steering clear of flashpoints like digital regulation and export controls. These moves were designed to signal openness, reinforce Beijing’s rule-abiding posture, and preserve market access at a moment when the United States is pursuing more assertive trade measures and revisiting globalization’s institutional foundations.

The final phase began as soon as the Geneva talks concluded. Over the following two weeks, Beijing launched a tightly choreographed series of bilateral engagements with European capitals—France, Germany, Poland, Denmark, and the Netherlands—tailored to exploit internal divergences and delay emerging regulatory actions. Beneath the appearance of constructive diplomacy was a clear pattern: blunt Brussels’s momentum, fragment consensus, and recast China’s relationship with Europe as a patchwork of pragmatic alignments rather than a bloc-to-bloc rivalry.

The PRC now faces a two-front struggle—one against Washington’s escalating tech restrictions and another against Brussels’s slow but accelerating pushback on trade, investment, and security. The core of Beijing’s response is division and offset: isolate and pressure key EU member states where it still holds leverage, bypass EU institutions where consensus is forming, and dilute emerging trade restrictions through pragmatic, transactional diplomacy. With transatlantic alignment deepening—structurally if not always rhetorically—room for maneuver is narrowing. Yet as long as European states remain divided in their market entanglements and geopolitical outlooks, Beijing will continue to exploit those fractures—using bilateral diplomacy to stall EU deliberation and undercut the momentum of transatlantic coordination.

Preempting Transatlantic Alignment After Geneva

In the immediate aftermath of the talks, Beijing launched a tightly choreographed series of diplomatic engagements across Europe. These were intended to reinforce the PRC’s dual-track strategy of pushing back against Washington’s tech restrictions and trade penalties while securing Europe as a stabilizing export partner and high-tech collaborator.

Beijing’s post-Geneva diplomacy was prefaced by a clear signal of strategic intent. On May 2, the Economic Daily (经济日报)—a Party-run outlet often used to preview internal economic priorities—published a lead editorial framing the PRC as a defender of the global trade order. The article declared that the PRC and European economies are “highly complementary” (高度互补) and called for deepening cooperation in the face of the United States (Economic Daily, May 2). [2] Beneath the cooperative tone, the piece conveyed calibrated frustration, blaming the United States for destabilizing global trade and debt markets .This message amplified the line Beijing had laid down during Xi Jinping’s state meeting with Spanish Prime Minister Pedro Sánchez in April, where Xi urged the PRC and Europe to “jointly maintain the trend of economic globalization” (共同维护经济全球化潮流) and resist “unilateral bullying” (抵制单边霸凌行径)—Beijing’s standard euphemism for U.S. policy (MFA, April 11).

The ground campaign opened on May 9 with a meeting between Vice Minister Li Chenggang (李成钢) and Swiss State Secretary Helene Budliger Artieda, focused on upgrading the China-Switzerland Free Trade Agreement. While the agreement itself was framed as a continuation of pragmatic cooperation, Switzerland was cast as a “first mover” in European trade relations with the PRC (MOFCOM, May 13). No links were drawn to the concurrent tariff standoff with the United States, but the message was that economic ties with Europe could proceed on a separate, unpoliticized track. Two days later, on May 11—the same day PRC officials concluded the Geneva talks—vice premier He Lifeng (何立峰) met with WTO director-general Ngozi Okonjo-Iweala. He publicly reaffirmed Beijing’s support for multilateralism, free trade, and the stabilization of global governance institutions, while briefing Okonjo-Iweala on the Geneva meeting’s outcomes (Xinhua, May 12). The meeting reinforced the narrative set forth in the May 2 Economic Daily editorial: the PRC, not the United States, is defending global trade norms; and Europe’s interests align more naturally with PRC economic stability than with American politicization of trade.

The final engagement in this sequence brought the strategy to the regulatory level. At a May 13–14 China–EU Financial Working Group meeting in Brussels, discussions spanned financial technology, cross-border data flows, sustainable finance, and payment systems, with the PRC proposing a standing technical exchange mechanism (PBOC, May 14). The talks showcased Beijing’s aim to institutionalize ties with European regulators while avoiding politically sensitive headlines. That same week, the PRC’s vice chair of the National Financial Regulatory Administration (NFRA), Xiao Yuanqi (肖远企), participated in a Basel Committee plenary in Stockholm, signaling Beijing’s intent to remain embedded in global standard-setting bodies even as it faces pressure on trade and technology fronts (NFRA, May 21). Taken together, the Brussels session and Basel participation demonstrated a clear pattern: the PRC is leaning into technocratic diplomacy to maintain long-term access to European markets and regulatory ecosystems, even as broader geopolitical tensions escalate. The post-Geneva campaign thus reinforced Beijing’s deeper strategy of maintaining economic interdependence with Europe, delaying U.S.-led decoupling efforts, and presenting Beijing as the more stable and rule-bound global actor.

Bilateralism to Offset Brussels

Over May 15–19, Beijing executed a dense series of bilateral engagements with France, Germany, Poland, and Denmark, each calibrated to exploit internal differences within the EU and weaken Brussels’ regulatory momentum. The centerpiece was the May 15 China–France High-Level Economic and Financial Dialogue, where the two sides finalized agreements on poultry trade and breeding stock, reaffirmed support for multilateralism, and promoted greater openness to Chinese investment. While the material outcomes were modest, the political optics were carefully arranged. The PRC praised France as a “driver” (带动引领) of EU–PRC ties, implicitly positioning Paris as a counterweight to Brussels (People’s Daily, May 19). This continues Beijing’s long-held goal of elevating France’s bilateral channel as a potential buffer against future EU-wide regulatory escalation, particularly in areas like data governance, green subsidies (e.g. the EU’s Net-Zero Industry Act), and market access (China Brief, December 1, 2023, May 4, 2024).

The tempo and tone shifted in Beijing’s May 19 calls with German and Polish foreign ministers, where diplomacy took on a more defensive and transactional character. In his call with German foreign minister Johann Wadephul, Foreign Minister Wang Yi (王毅) warned against “de-risking” (去风险) rhetoric and urged Berlin to help resolve the EU’s ongoing anti-subsidy probe into Chinese electric vehicles (Xinhua, May 19). Notably, Wang invoked the Taiwan issue in highly direct terms, comparing it to Germany’s 1990 reunification and asserting that the PRC expects the same respect for its “core interests” (核心利益). With Poland—soon to hold the rotating EU presidency—Beijing appealed to Warsaw’s future institutional role, urging it to guide EU-PRC ties in a more “constructive” (建设性) direction (Xinhua, May 19). Wang also reiterated Beijing’s line on Ukraine, framing the PRC as a neutral mediator while avoiding any criticism of Russia. Across both calls, no new offers were made, only appeals for influence and moderation from within the EU system.

Table 1: PRC Bilateral Engagements in Europe

(Source: Author research)

Denmark, by contrast, received a more measured message. During an in-person meeting with Danish Foreign Minister Lars Løkke Rasmussen, the PRC emphasized green development and mutual investment, while expressing respect for Denmark’s sensitivities over Greenland (Xinhua, May 19). This differentiated approach illustrates a core aspect of Beijing’s bilateral strategy: tailor messages to each country’s leverage point, from institutional leadership (Poland) to trade policy (Germany) to sustainability diplomacy and sovereignty concerns (Denmark). Taken together, these engagements are aimed at marginalizing Brussels’ position as the center of EU deliberation on the PRC. By leveraging state-to-state diplomacy, Beijing seeks to fragment consensus, stall regulatory action, and recast its relationship with Europe as a patchwork of flexible alignments.

This bilateral strategy also extends beyond the EU’s institutional perimeter. On May 20, Beijing revived its long-standing commercial outreach to the United Kingdom through a meeting with the 48 Group Club, a business-friendly forum with historic ties to the PRC (MOFCOM, May 20). The United Kingdom, no longer bound by EU policy coordination, offers Beijing a venue to test the limits of Western alignment—especially given London’s deep security ties with Washington. PRC officials emphasized openness, denounced protectionism, and praised bilateral cooperation in trade and services. While largely symbolic, the engagement served a strategic purpose: to reframe the PRC as a pragmatic economic partner to individual Western economies, even as it clashes with Brussels on regulatory fronts.

Working Toward the Hague: PRC Courts the Netherlands Amid Regulatory Tensions

By late May, Beijing’s bilateral charm offensive was tempered by rising frustration with the European Commission. The immediate trigger was Brussels’s decision to sanction several PRC firms as “industrial enablers” of Russia’s war effort—a move Beijing denounced as legally groundless and politically provocative (European Council, May 20; EUR-Lex, May 20). At a May 21 press conference, Foreign Ministry spokesperson Mao Ning labeled the sanctions “unreasonable”(无理) and warned that the PRC would take “necessary measures” (必要措施) in response (MFA, May 21). The same event also featured criticism of a new EU digital tariff targeting small-parcel e-commerce, framed as a discriminatory move against platforms like Shein and Temu. The subtext of these statements is Beijing’s view of the EU’s expanding regulatory actions as part of a broader response by developed economies to constrain the PRC’s growth and restrict market access. In public messaging, Brussels was again being targeted as a co-participant in U.S.-led containment.

Even as rhetoric hardened toward Brussels, Beijing struck a markedly different tone with the Netherlands, whose “Big Five” firms ASML, ASM, NXP, Nexperia, and Besi sit at the center of global semiconductor supply chains. The PRC remains deeply dependent on Dutch lithography equipment, particularly from ASML. While the Netherlands has blocked exports of ASML’s most advanced extreme ultraviolet (EUV) systems since 2019 under U.S. pressure, the more recent expansion of Dutch licensing controls to cover less advanced deep ultraviolet (DUV) tools and inspection equipment presents a direct threat to the PRC’s manufacturing base (Government of the Netherlands, January 15).

This technological dependence explains the highly disciplined tone of recent diplomatic engagements. A sequence of meetings in The Hague and Beijing from May 21–23 produced a carefully balanced diplomatic script. The PRC reiterated its openness to Dutch investment, affirmed support for multilateralism, and emphasized “non-discriminatory” (非歧视营商) business conditions (MFA, May 22; People’s Daily, May 23). On the sensitive issue of ASML and semiconductor export controls, both sides agreed to maintain dialogue “through existing channels” (通过现有渠道)—a coded acknowledgment of unresolved tensions. For the PRC, restoring access to ASML’s DUV tools is a strategic imperative; for the Netherlands, the challenge is to avoid a rupture with the PRC while sustaining its alignment with U.S. export control regimes.

This calibrated diplomacy underscores the selective nature of the PRC’s European engagement. While Brussels now faces sharper rhetorical pushback and retaliation threats, key EU member states are still being cultivated individually—especially those with leverage over chokepoint technologies or institutional-regulatory influence. Vice Premier Ding Xuexiang’s (丁薛祥) remarks during his May 23 meeting with Dutch officials captured the posture: the PRC welcomes Dutch investment and seeks “practical cooperation” (务实合作) but expects reciprocity and restraint on export controls (People’s Daily, May 23). No breakthroughs were announced, but that was never the goal.

Germany’s Diminishing Room for Maneuver

The final and most symbolically weighty stop in the PRC’s May diplomatic circuit was Xi Jinping’s May 23 phone call with German chancellor Friedrich Merz. The exchange came at a time of deepening economic anxiety in Berlin. Germany’s 2025 growth forecast had been revised to zero amid a broader industrial slowdown and export uncertainty worsened by tariff pressures from both the United States and the PRC (Deutsche Welle, April 24; AP, April 24). For Xi, the call was less about resolving disputes than sustaining bilateral ballast. He emphasized political trust, stable cooperation, and renewed economic momentum, with a particular push for deeper alignment in AI, green development, and high-end manufacturing—areas where the PRC is now an assertive competitor (Xinhua, May 23).

Despite the language of continuity, the structural imbalance between the PRC and Germany is becoming deeply embedded. In 2024 alone, German companies invested €5.7 billion ($6.5 billion) in the PRC—€4.2 billion ($4.8 billion) of it from the auto sector—making Germany by far the EU’s largest investor in the PRC market (China-CEE Institute, May 25). By contrast, PRC investment in Germany remains smaller but increasingly strategic, with a growing share in renewables, research and development, and advanced production. The PRC has overtaken Germany in several key export sectors, including autos and industrial machinery, and now holds a trade surplus of roughly €80 billion ($92 billion). This asymmetry leaves Berlin economically entangled but strategically exposed—dependent on a market where its competitive edge is eroding.

For Beijing, Germany remains a critical counterweight inside Europe. The PRC is increasingly able to dictate the terms of engagement as Germany becomes constrained by its own economic vulnerability. For Germany, the call therefore reinforced a narrow path of preserving a vital trade relationship without provoking Brussels or Washington. Merz affirmed the one-China policy and emphasized pragmatic engagement but made no new offers. The exchange underscored how the PRC now uses bilateral relations not only to sustain economic ties, but to deepen policy divergence within the EU on contested issues.

Conclusion

At the EU level, relations with the PRC are likely to harden. Current trends suggest more coordinated trade enforcement, stricter scrutiny of Chinese firms, and growing alignment with U.S. policy on technology and investment controls. The EV probe and sanctions on Chinese entities signal that Brussels is no longer just watching Beijing, it is beginning to act—slowly, but with growing resolve. The PRC will continue to protest these moves as protectionist, but its influence over the EU’s regulatory trajectory is weakening.

Bilateral ties, by contrast, will remain Beijing’s primary tool. The PRC will keep cultivating countries with sectoral leverage or institutional roles to stall collective action. These engagements will stay pragmatic, transactional, and narrowly framed around market access, supply chains, and investment. As long as the EU’s center of gravity remains cautious and slow-moving, the PRC will use bilateral diplomacy to shape outcomes in its favor, one capital at a time.

Notes

[1] The European Union has taken gradual but increasingly forceful steps to protect its economic and technological base from industrial overreach from the PRC. The launch of the €43 billion ($49 billion) European Chips Act, the adoption of the Net-Zero Industry Act, and a series of reforms to EU state aid rules have signaled a new willingness to intervene in strategic sectors—especially semiconductors, electric vehicles (EVs), clean technology, and data (EUR-Lex, September 13, 2023, June 13, 2024). While these measures rarely name the PRC directly, they are designed to insulate European industries from subsidized foreign competition and prevent long-term technological dependence. In parallel, the EU has begun deploying defensive trade instruments more aggressively: an anti-subsidy investigation into Chinese EVs launched in 2023 produced sweeping countervailing duties by late 2024, and the Commission is moving to expand outbound investment screening and supply chain resilience rules (European Commission, January 14).

[2] Two other recent China Brief pieces have focused on Beijing’s strategic approach to Europe (China Brief, February 28, April 11).