Photo: VCG

Three months after German Chancellor Friedrich Merz's visit to China, according to media reports, German Economy Minister Katherina Reiche is scheduled to lead a delegation of corporate executives to China from May 26 to 29.

As of press time, the visit has not been officially confirmed by China and Germany. The media disclosure comes at a time when Europe has ramped up de-risking and protectionist moves, while repeatedly hyping claims over China's alleged "overcapacity" and export impacts. In sharp contrast to Brussels' stance of protectionism, Beijing has witnessed an intense flurry of diplomatic activities this month, with state leaders from multiple nations including US and Russia paying visits to seek dialogue and cooperation.

According to a Reuters report on Thursday, top executives of BASF, Thyssenkrupp and Siemens Energy will participate in Reiche's first trip ‌to China next week. 

The reported visit, according to a Politico report, has divided opinion in Germany, with some believing that Reiche seeks to brand Germany as "a reliable trading partner", while others like Nicolas Zippelius, a Bundestag member from Merz's governing faction, claimed that "Beijing will continue to increase dependencies, and the EU should now act to ensure its companies can compete." 

Beyond Germany, the broader EU has also been displaying the same tug-of-war tendencies recently in its approach toward China.

Citing sources, Reuters reported on Wednesday that the EU has shortlisted tungsten, rare earths and gallium for its first joint stockpile of critical minerals aimed at reducing its reliance on China. The move came after a Financial Times report on Monday said that the EU is drawing up plans to force companies in the bloc to buy critical components from at least three different suppliers in an attempt to reduce reliance ‌on China. 

However, on Thursday, Bloomberg said that the EU will propose temporarily lifting sanctions on a major Chinese semiconductor supplier after automakers warned of impending supply chain chaos if the ban isn't removed.

Jiang Feng, a researcher at Shanghai International Studies University and President of the Shanghai Regional Studies Association, pointed out that as China sees rising competitiveness in economy and technology while Europe witnesses dwindling innovation and competitive edge, the EU has resorted more frequently to isolationist and defensive policies.

Filled with a sense of insecurity, Brussels has therefore adopted a dual approach: it seeks to reap benefits from China's development while imposing policy restrictions to buy time and room for its own growth.

Zhang Jian, Vice President of the China Institutes of Contemporary International Relations, noted that long-standing divides persist within the EU over economic and trade ties with China. The bloc tends to view relations from a strategic competition perspective, whereas some member state governments and enterprises prioritize economic and industrial growth.

He added that US influence weighs heavily on the EU's current China policy. Washington's frequent unilateral and protectionist moves have set a bad example for Europe. Meanwhile, the US keeps pressuring the EU to align its economic and trade policies with its own and jointly contain China's development.

During the G7 finance ministers meeting held in Paris this week, US Treasury Secretary Scott Bessent told Reuters that he had warned European counterparts that they needed trade protections against a flood of Chinese exports that would damage their economies, implying the issue of "overcapacity."

Echoing Bessent, during the G7 gathering, some European media appeared to step up hype surrounding the so-called "China threat" rhetoric. 

The Guardian said in an article on May 19 that Europe is "facing a fresh China shock that threatens to cannibalise local factories, leading to job losses and de facto colonisation of industry by Beijing." 

Euro News titled an article published on May 18: "As trade war with China looms, how can the EU defend itself?" Citing the EU's widening surplus with China, the news outlet claimed that the European Commission is considering a range of tools "to shield the bloc from cheap Chinese imports", including reducing its dependence on Chinese components and imposing tariffs on strategic sectors. 

In response to the EU's possible new trade tool to address the so-called China "overcapacity" issue, He Yadong, spokesperson of China's Ministry of Commerce, said on Thursday that China will resolutely respond with countermeasures should the EU insist on unveiling a so-called new instrument and imposing discriminatory and restrictive measures against Chinese companies or products.

If a trade surplus is labeled as "overcapacity", then would European exports such as automobiles, pharmaceuticals, wine, and cosmetics also be considered as "overcapacity?" He asked.

"Some politicians in the EU tend to blame external factors for its declining competitiveness and sluggish economic growth, and resort to protectionism to cope with pressures and domestic grievances," Jiang said, "Such practices fail to tackle Europe's long-standing inherent problems and do not serve the fundamental interests of European nations."

Against an increasingly complex global landscape and weak economic momentum, a growing number of countries have realized that China represents development opportunities, and pragmatic cooperation with China aligns with their own interests, the expert added. 

According to Zhang, if the EU corrects its biased perception and regards China as a partner, China-EU economic and trade cooperation boasts immense potential. Investment by Chinese enterprises in Europe can improve local economic conditions and directly boost European industries and employment, he added.