AI-Summary – News For Tomorrow
Macron’s China visit yielded no progress on Ukraine or trade imbalances, as Xi focused on domestic economic priorities. China prioritizes strengthening domestic demand in its new five-year plan, aiming to boost household consumption. However, it misdiagnoses weak consumption as a supply problem, hindering real progress. China’s overarching policy focuses on industrial dominance to surpass the US and reshape global governance. Macron has decried China’s trade imbalance as a threat to European industry, leading the EU to implement tariffs and surveillance mechanisms. The UK’s response remains comparatively cautious, but collaborates with the EU on trade policies.
News summary provided by Gemini AI.
Emmanuel Macron came back from China in early December empty-handed. The French president’s appeal to his Chinese counterpart, Xi Jinping, to help stop the war in Ukraine was never going to gain traction given Beijing’s unqualified support for Russia.
Urging Xi to address China’s surging trade surplus, the result of the country’s economic and industrial policies, predictably also fell on closed ears.
In any event, Xi’s main concerns were the imminent final politburo meeting of the year and the annual Central Economic Work Conference (CEWC) that followed. Centre stage was the passage of the new 15th five-year plan, due to be presented at the National People’s Congress in March, and what would be needed in 2026 to get it off to a good start.
Beijing has identified strengthening domestic demand as the top task for 2026, echoing a narrative that is three to four years old. A shift in tone is nonetheless notable, along with the intent to boost household consumption and income. So far, real progress in this area has been limited and the government still misdiagnoses weak consumption as a supply problem, not a demand one. In other words, it is associated with inadequate supply of consumer goods and services.
The overarching policy framework though is about the commitment to industrial policy, which accounts for a far larger share of GDP than most countries (barring Ukraine and Russia with their huge spend on defence). After all, the government’s objective is to dominate what Xi calls the fourth Industrial Revolution by the middle of the century, as it looks to dislodge the US in the global order and establish a governance system more attuned to its political liking.
Emmanuel Macron has called China’s export levels ‘a question of life or death’ for European industry. Photograph: Sarah Meyssonnier/AFP/Getty Images
In Beijing, Macron said the Chinese trade imbalance with Europe was “unbearable”, labelling it “a question of life or death” for the continent’s industry. To address this, the EU has imposed some tariffs on Chinese EV imports and established an import surveillance mechanism to monitor and report on unfair competition and dumping. The EU will doubtless become more assertive.
The UK response so far has been relatively timid. The government is collaborating with the EU on trade policy for steel and the business secretary, Peter Kyle, will have the power to direct the Trade Remedies Authority to launch investigations into unfair practices.
