Fractured Europe’s China test

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Back in 2015, Hong Kong-listed consumer group Fosun made a splash by snapping up French holiday operator Club Med, known for its all-inclusive sun, sea and sand vacations.

Within a year or so, the outlook for Chinese acquisitions in Europe had clouded over and the overall value of deals went into a downward spiral — until now.

Tomorrow's EU-China summit in Beijing will go some way to determining whether that uptick is a blip or a portent of warming ties as President Donald Trump upends the world order.

There's certainly a lot for European Union and Chinese leaders to discuss.

Almost a decade ago, China began to raise concerns in Europe over its purchases of critical infrastructure such as ports and utilities, prompting governments to tighten investment screening.

China has now moved up the value chain, and those same governments are only too keen to attract plants for electric vehicles and batteries from the likes of BYD and CATL.

But as well as shifting the nature of its investments, China is focusing them in countries like Hungary and Serbia that are more friendly to Beijing.

It's one divide among many that will feed into the summit. New European sanctions that hit Chinese companies, and China's refusal to pressure Russia over its war on Ukraine are further sources of friction.

Conventional wisdom would suggest that Trump's pursuit of America-First policies from trade to security might push the EU and China closer together.

That seemed to be the case earlier this year. But the mood has since soured.

Trump is meanwhile making nice with Beijing ahead of a possible meeting with President Xi Jinping. The EU is notable for having failed to secure a US tariff deal.

Where this all leaves the bloc may become clearer in Beijing.

But from here it looks increasingly like Europe is on its own. — Alan Crawford

Molten copper is poured into molds at a Zijin Mining Group smelting plant in Serbia in April. Photographer: Oliver Bunic/Bloomberg

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