[China Trends #25] - Dealing With a Two-Faced China: From Global Trade to Russia

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By François Godement

Perceptions of China are changing, if not among its neighbors-who directly face security concerns ranging from territorial and maritime issues to ongoing influence operations- at least among more distant partners, where public opinion does not perceive an immediate and direct geopolitical challenge from China. This is above all the case in Europe, for several reasons.

First, while Europe continues to discuss "de-risking" and debates, whether or not it would be realistic to "decouple" from the Chinese economy for security reasons or to prevent competition under asymmetric and unfair trade conditions, the reality of China’s export tsunami has not abated. Figures show that it may in fact even be increasing speed in early 2026. A 2025 Eurobarometer survey found that 83 percent of Europeans were in favor of diversifying trade relations, an opinion that clearly targets China since another poll by Pew finds a slim majority of Europeans now regard China as the world’s first economic power, surpassing the United States;

European public opinion is sensitive to the drama of European deindustrialization. And yet, as consumers, Europeans increasingly endorse Chinese products, given the rock-bottom prices and increasing appeal, with little regard to the issue of unfair competition. This, therefore, pits consumers’ against producers’ interest, and creates a schizophrenic public opinion. Overall, China’s year-on-year exports to the European Union have increased by 28 percent in January and February, with Italy (36 percent), France (32 percent) and Germany (31 percent) leading the march.

Second, China’s public diplomacy has, with exceptions, been mellowing for quite some time. All stars are now aligned for a soft power push. Much media attention in Europe is focused on the duty onslaughts of the Trump administration and its recurring rants against the European Union and many European leaders. U.S. criticism may have a point in some cases, such as Europe’s desperately slow return to a credible defense posture that hurts its case with the United States on Ukraine. But there is undoubtedly a clash in values in the open, and China’s public standing benefits from the projection of U.S. cultural wars on the European continent.

Here, of course, China presents a dual face. While it praises pragmatism and calls for compromise, it has shown no actual flexibility on the burning issues in its relations with the European Union: trade rebalancing, and its support for Russia in its war against Ukraine.On economic flows, Europeans are clearly signaling through the planned Industrial Accelerator Act (IAA) their interest in an investment deal with China, ushering in an epochal reversal of China’s joint-venture strategy from the Deng Xiaoping era. This position is, so far, much more open than that of the U.S. administration. China’s policy response, whether at the political level or through the future behavior of its companies, is unknown at this point. But for the time being, little is changing, and one can pinpoint the strong asymmetries and the uneven level playing field that contrast with China’s praise of free market competition.

On Russia and Ukraine-which the European Union and member states such as France and Germany have repeatedly flagged as the top priority in their diplomatic interactions with Xi Jinping-it is essential to read the kind of open arm-twisting that China practices in its Track 1.5 dealing with Ukraine. It is brutal language, and if there was a need to disprove China’s professed neutrality between Russia and Ukraine, this is a smoking gun as much as its dual-use exports, energy imports, and Russia’s access to financial markets.

Third, this same bifurcating approach-verbally restrained toward the European Union as a whole, while arguing, lobbying or applying pressure at the Member State level-is well exemplified by published analyses and narratives on European affairs. It may in fact be more openly expressed than on Russia-Ukraine issues. Chinese commentaries welcome the rising theme of European strategic autonomy playing alongside tongue-in-cheek comments and, at times, biting irony regarding the obstacles facing European politics and policymaking. This brings to mind a famous quip by Charles Péguy, often attributed to Hegel regarding Immanuel Kant: "Kantianism has clean hands, but it has no hands."

Copyright Image : Andres MARTINEZ CASARES / POOL / AFP
 

By Yurii Poita

Since Russia’s invasion of Ukraine in 2022, China has gradually shifted toward a de facto pro-Russian position. Yurii Poita, Head of the Asia-Pacific Section at the Center for Army, Conversion and Disarmament Studies, Ukraine, examines Chinese expert debates on the war and draws on insights from Track 1.5 and Track 2 exchanges with Chinese officials and analysts. As China has emerged as a key supplier of military-related equipment to Russia, these sources indicate that China has consistently undermined Ukrainian peace initiatives, and has sought to discourage European and third-country support for Kyiv through influence operations. Despite its formal rhetoric in favor of a negotiated settlement and claims of neutrality, Beijing’s behavior points to a different strategic calculus: in practice, it appears to favor a Russian victory, both to weaken Europe and to avoid finding itself in a position of strategic vulnerability.

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By Jacob Gunter

A recurring theme in EU–China economic debates is Beijing’s question as to why the EU treats China’s trade surplus as more problematic than those of other partners. Chinese experts typically argue that excess capacity is not the result of state intervention, but rather reflects the dynamism of China’s domestic industrial ecosystem. Jacob Gunter, Head of MERICS’ Economy and Industry Program, situates this Chinese narrative within its broader political context. He highlights a set of structural drivers that complicate this Chinese posture: pervasive subsidies across multiple administrative levels; structurally high household savings coupled with weak consumption; and market practices that systematically disadvantage European firms. Against this backdrop, the EU faces a narrowing set of choices: either pursue a more assertive de-risking strategy, or risk a gradual erosion of its industrial base under the pressure of sustained Chinese overcapacity.

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By François Godement

Published Chinese views on the European Union are evolving, both in volume and in tone. In this article, François Godement, Special Advisor at Institut Montaigne and Resident Senior Fellow, identifies a clear dichotomy between geoeconomic and geopolitical narratives. Economic analyses tend to adopt a more pragmatic, even constructive tone, whereas geopolitical commentary is markedly more critical. In this register, the EU is often portrayed as weak or ineffective, whether in the context of the war in Ukraine or tensions in the Strait of Hormuz, and its discourse on strategic autonomy is treated with skepticism. These references, however, are neither neutral nor consistent. They are selectively mobilized to serve Chinese strategic interests, ultimately reinforcing the broader message to European leaders that engagement with Beijing remains the EU’s most viable course of action, and perhaps the only one.

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