Macron, von der Leyen press China's Xi on trade in Paris talks

Xi was in Europe for the first time in five years, at a time of growing business tensions that include the European Union investigating Chinese industries such as electric vehicle exports, while Beijing probes mostly French-made brandy imports. The European Union "cannot absorb massive over-production of Chinese industrial goods flooding its market," von der Leyen told reporters after she, Macron and Xi held talks at a round table under the gilded ceilings of the Elysee Palace.

French President Emmanuel Macron and EU Commission chief Ursula von der Leyen urged Chinese President Xi Jinping in Paris on Monday to ensure more balanced trade with Europe, at a start of a two-day visit during which Macron also pressed him on Ukraine. Xi was in Europe for the first time in five years, at a time of growing business tensions that include the European Union investigating Chinese industries such as electric vehicle exports, while Beijing probes mostly French-made brandy imports.

The European Union "cannot absorb massive over-production of Chinese industrial goods flooding its market," von der Leyen told reporters after she, Macron and Xi held talks at a round table under the gilded ceilings of the Elysee Palace. "Europe will not waver from making tough decisions needed to protect its market," she said, in reference to the trade probes and the sanctions that could follow. The relationship between Europe and China is hurt by unequal market access and by Chinese state subsidies, she said.

Macron told Xi that Europe and China needed to resolve structural difficulties, in particular on trade, adding that Europe's future would partly depend on its capacity to develop a balanced relationship with China. The EU's more robust stance on trade with China dovetails with Washington's approach. U.S. Treasury Secretary Janet Yellen has warned China that Washington will not accept new industries being "decimated" by Chinese imports.

In brief public comments ahead of the talks, Xi said he viewed relations with Europe as a priority of China's foreign policy. "As the world enters a new period of turbulence and change, as two important forces in this world, China and Europe should adhere to the positioning of partners, adhere to dialogue and cooperation..." Xi said.

Minutes earlier, Macron and Xi shook hands in the Elysee Palace courtyard while the Republican Guard orchestra played. Macron has a tendency to hug his counterparts but Xi does not. Macron appeared to give Xi's arm a squeeze as they were shaking hands. Macron walked into the Elysee Palace with him.

The two later reviewed troops together during an official welcome ceremony. NOT UNIFIED

During their talks, held behind closed doors, Xi told Macron and von der Leyen that he hoped EU institutions would "develop the right perception of China", Chinese state media said. He agreed that economic and trade frictions should be addressed through dialogue. But he also told them that the problem of China's overcapacity "does not exist either from the perspective of comparative advantage or in light of global demand", Chinese media said.

French diplomatic sources said Xi seemed receptive to his counterparts' comments on trade imbalances, adding that the objective of the visit was to get messages across. Whether they would be acted upon remained to be seen, the sources said. The EU's 27 members - in particular France and Germany - are not unified in their attitude towards China, which does not help obtaining change. While Paris advocates a tougher line on the EV probe, Berlin wants to proceed with more caution, sources say.

German Chancellor Olaf Scholz will not join Macron and Xi in Paris due to prior commitments, sources said. Some French government officials say privately that they are concerned Berlin will try to undermine the electric vehicle probe, which has zeroed in on Chinese carmakers BYD, Geely and SAIC. China is a key market for Germany's export-led economy and its carmakers such as BMW and Mercedez-Benz.

French cognac makers exposed to China's retaliatory anti-dumping investigation include Remy Cointreau, Pernod Ricard and LVMH-owned Hennessey. France and China can legitimately support their domestic industries, but any such policies have to be fair and reciprocal, French Finance Minister Bruno Le Maire told a Franco-Chinese business forum.

"We are currently far from balanced," he added. France is also pushing China to open its market to French agricultural exports and resolve issues around the French cosmetic industry's concerns about intellectual property rights.

"Among ourselves, French and Chinese companies and authorities, we talk to each other continuously," Jean-Paul Agon, the chairman of French cosmetics giant L'Oreal, told the same business forum. "What matters is our common, shared desire to find solutions and move forward together." China, meanwhile, may announce an order for around 50 Airbus aircraft during Xi's visit.

After further talks and a dinner at the Elysee Palace in the evening, Macron will take Xi to the Pyrenees on Tuesday, a mountainous region dear to the French president as the birthplace of his maternal grandmother.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)