Xi's visit to Europe + Quantum technology + Hong Kong

Hefty US tariff increases on selected imports from China – including a 100 percent surcharge on electric vehicles (EV) – have put the European Union in a quandary: follow Washington’s lead and risk European carmakers being shut out of the Chinese market, or do nothing and contend with the threat of an ever-growing wave of imports smothering the region’s nascent EV sector. 

Among other topics, this issue of MERICS China Essentials looks at Xi Jinping’s reluctance to discuss the issue of China’s manufacturing overcapacity while recently in Europe. “This lack of willingness and [Chinese] moves to disrupt EU’s de-risking and enlargement efforts look set to make EU-China relations more tense,” warns Grzegorz (Greg) Stec , Head of MERICS’ Brussels Office.  The fact that Xi met Russia's president Vladimir Putin in Beijing only a few days after his return from Europe shows that tensions will likely remain high in EU-China relations.

The extension of US export restrictions to include Chinese quantum technology companies could also become a headache for European policymakers. “The US measures should prompt the EU to clarify when and how European organizations can collaborate with China on quantum technology,” says Jeroen Groenewegen-Lau , MERICS Head of Program Science Technology and Innovation.  

Meanwhile, the Hong Kong government continued to woo mainland tourists as it finally won judicial support for its bid to have the pro-democracy anthem "Glory to Hong Kong" removed from the internet. “All its publicity campaigns cannot hide the city government’s fears of any challenge to Beijing’s power,” says Katja Drinhausen, Head of MERICS Politics & Society Program.

Lastly, Beijing is issuing bonds maturing as late as 2074 to fund key industrial projects. In doing so, it “is betting that China can get through a turbulent short and medium term with the help of money that it can repay in a more prosperous future,” says Jacob Gunter , Lead Analyst MERICS.  

You can read this issue of MERICS China Essentials on our website.