Introduction
President Emmanuel Macron's fourth state visit to China (December 3-5, 2025) represents a critical juncture in the France-China Comprehensive Strategic Partnership, taking place amid unprecedented geopolitical realignment and mounting economic pressures. The visit focused on deepening cooperation while addressing key French and European concerns, with wide-ranging talks covering everything from ending the war in Ukraine to redressing global economic imbalances. This relationship, characterized by sixty years of diplomatic ties since France became the first major Western country to establish formal relations with the People's Republic of China in 1964, now faces its most complex test as both nations navigate an increasingly fragmented international order.
The December 2025 visit occurred at a particularly strategic moment: France prepares to host the 2026 G7 summit while China readies to chair the Asia-Pacific Economic Cooperation (APEC) forum. In a rare departure from protocol, Chinese President Xi Jinping personally accompanied Macron to the southwestern city of Chengdu, echoing Macron's May 2024 hosting of Xi in the Pyrenees—gestures emphasizing the personal rapport between the two leaders and the importance both nations place on maintaining strategic dialogue despite their differences.
Economic Relations: Growing Imbalance and Calls for Rebalancing
The Expanding Trade Deficit Crisis
The economic relationship between France and China is characterized by deepening engagement in traditional sectors—aerospace, nuclear energy, and luxury goods—alongside emerging cooperation in green economy, digital economy, and Artificial Intelligence (AI). However, this cooperation is increasingly overshadowed by a stark and worsening trade imbalance that has become the central concern of French economic policy toward China.
In 2024, France's goods trade deficit with China reached approximately €47 billion ($55 billion), representing a dramatic escalation from previous years and underscoring structural challenges in the bilateral economic relationship. China is France's largest trading partner in Asia and its seventh-largest globally, yet this relationship has become increasingly one-sided. China alone accounts for nearly half (46%) of France's total foreign trade deficit, a staggering concentration that highlights France's vulnerability and the unsustainability of current trade patterns.
The European Union's broader trade deficit with China has grown by nearly 60% since 2019, with France experiencing one of the most acute imbalances among major European economies. French exports to China—dominated by aerospace technology, luxury goods, cosmetics, and agricultural products like cognac, wine, pork, and dairy—have failed to keep pace with surging imports of electronics, machinery, and increasingly sophisticated manufactured goods, particularly electric vehicles.
Macron's Push for Balance and Increased Investment
During the December 2025 visit, Macron explicitly called for a more balanced economic relationship and urged increased Chinese direct investment in France, warning that China's expanding trade surplus with other countries is becoming "unsustainable". This represents a shift in European strategy: rather than simply seeking to export more to China, France is now actively courting Chinese investment as a mechanism to create jobs, transfer technology, and rebalance economic flows.
Xi responded by stating that China is open to importing more high-quality goods from France in exchange for a "fair, conducive environment" for Chinese businesses in the European nation. This conditional response highlights the transactional nature of the relationship and China's desire for reciprocal treatment, particularly given recent EU measures such as tariffs on Chinese electric vehicles that Beijing views as protectionist.
The visit saw the signing of twelve cooperation agreements covering nuclear energy, education, agriculture, environment, and the conservation of pandas. Xi called for deepening bilateral collaboration in aerospace, nuclear energy, digital economy, biopharmaceutical and artificial intelligence sectors. Both sides committed to facilitate the balanced development of trade and ensure a "fair, transparent, nondiscriminatory and predictable business environment" for enterprises—language that reflects ongoing tensions over market access and regulatory barriers.
However, significant obstacles remain. France's support for EU tariffs on Chinese electric vehicles—which can reach up to 45.3%—has prompted retaliation from Beijing, including minimum price requirements on French cognac and investigations into EU pork and dairy products. These measures threaten key French agricultural exports and illustrate how trade disputes can quickly escalate across multiple sectors.
The Broader European Context
France's trade challenges with China are emblematic of broader European difficulties. The EU's massive trade deficit with China—exceeding €357 billion annually—has prompted calls for a fundamental reassessment of economic strategy. French companies, including approximately 2,100 subsidiaries operating in China, are increasingly adopting "In China, For China" strategies to maintain market presence while navigating global supply chain shifts and rising economic nationalism in both Europe and China.
Geopolitical Relations: Strategic Differences and Multilateralism
Russia, Ukraine, and the Limits of Influence
Both France and China publicly uphold the banner of multilateralism and advocate for an "equal and orderly multipolar world," but significant strategic differences persist, particularly concerning Russia's war in Ukraine. Macron's three-day visit aimed at getting China to exert pressure on Russia for a ceasefire deal with Ukraine, following his meeting with Ukrainian President Volodymyr Zelenskyy in Paris just before departing for Beijing.
Macron told Xi that "sometimes there are differences, but it is our responsibility to overcome them for the greater good," making a direct reference to Ukraine. He pressed Chinese President Xi Jinping to take a stronger stance on Russia's invasion, emphasizing the existential threat it poses to European security. France specifically sought Chinese commitment to refrain from providing Russia with any means to continue the war, including dual-use technologies and commercial drones that have been documented in attacks on Ukrainian civilians.
However, Xi remained noncommittal on these larger questions, stressing instead that both countries should demonstrate strategic independence and mutual understanding on issues concerning core interests. China has maintained its position of not condemning Russia's 2022 invasion, framing its stance as neutral and advocating for peace talks through "mutual consultation and mutual respect." China continues to be a key buyer of Russian goods, providing an economic lifeline that has allowed Moscow to sustain its war effort despite Western sanctions.
The divergence on Ukraine underscores a fundamental tension in France-China relations: while both nations advocate for strategic autonomy from the United States, they apply this principle in diametrically opposed ways when it comes to Russia. France sees Russia as a security threat requiring containment and consequences, while China views Russia as a strategic partner and fellow advocate for a multipolar world order that challenges Western hegemony.
Taiwan, Japan, and Regional Security Tensions
A newer and increasingly contentious dimension of France-China relations involves the escalating dispute between China and Japan over Taiwan. In early November 2025, Japan's Prime Minister Sanae Takaichi told Parliament that any attempt by China to blockade or invade Taiwan would amount to an existential matter for her country, potentially triggering the mobilization of Japan's Self-Defense Forces. Beijing reacted with fury, imposing economic counter-measures and launching a diplomatic offensive to isolate Japan.
China is actively seeking French diplomatic support in its dispute with Japan. During Macron's visit, Chinese Foreign Minister Wang Yi told his French counterpart Jean-Noël Barrot that he hoped Paris would continue "showing understanding for and supporting China's legitimate stance" and prevent Japan from "stirring up troubles" over Taiwan. China urged France to firmly abide by the "one-China principle" and support its position, attempting to leverage France's historical commitment to strategic independence from the US.
France has navigated this issue carefully. On one hand, it adheres to the One-China policy and consistently urges de-escalation and maintenance of the status quo in the Taiwan Strait. On the other hand, as a fellow G7 member with its own Indo-Pacific interests, France has reaffirmed its opposition to any unilateral use of force or coercion to change the status quo, effectively standing with Japan and the US on the principle of regional stability without explicitly endorsing Japan's more provocative statements.
This careful balancing act reflects Macron's broader vision of European strategic autonomy—a Europe that charts its own course independent of both US and Chinese pressure. However, as geopolitical tensions intensify, maintaining this middle ground becomes increasingly difficult, with both Beijing and Washington seeking to pull European nations toward their respective positions.
Strategic Autonomy and France's Unique Role
Macron continues to champion the concept of European strategic autonomy, believing that Europe and China should uphold dialogue and cooperation precisely because global geopolitical instability makes independence from any single power essential. France's position as a permanent member of the UN Security Council, nuclear power, and major European economy gives it unique leverage in global affairs that Macron seeks to preserve and enhance.
During the visit, both nations stressed their shared responsibility to uphold the post-World War II international order as permanent members of the UN Security Council. This appeal to shared institutional responsibility reflects France's effort to position itself as a stabilizing force in EU-China relations and to preserve constructive ties despite recurring frictions.
However, France's autonomy is constrained by its commitments to European unity and the transatlantic alliance. Macron has consistently invited European Commission presidents to join meetings with Xi, underscoring that France speaks not only for itself but as a leading voice within the EU. This dual identity—as both a sovereign nation pursuing strategic independence and a committed EU member state—creates inherent tensions in France's China policy.
China's Technological Ascent and Europe's Competitive Lag
Historical Context of Innovation
The contemporary technological competition between China and Europe represents, in many ways, a historical reversal. For centuries, China enjoyed technological superiority over Europe. China's "Four Great Inventions"—the compass, gunpowder, papermaking, and printing—revolutionized technology and spread westward, significantly impacting European development. This advantage began to wane after the 15th century due to internal socio-political factors in China and the advent of the Scientific Revolution in Europe, which laid the foundation for modern industrial and technological dominance in the West.
Now, in the early 21st century, the tables are turning once again. China's rapid modern ascent has not only caught up with European technological capabilities in many areas but has begun to surpass them, creating an existential challenge for European competitiveness and industrial strategy.
The Modern Technological Shift
China's technological resurgence is rooted in a highly effective state-directed industrial policy that contrasts sharply with Europe's more fragmented approach. Several factors explain China's competitive advantages:
Massive State Investment: Since the late 20th century, China has poured vast state resources into Research and Development (R&D), often exceeding the combined R&D spending of individual European nations. This investment is channeled through strategic national programs focusing on "hard" technologies like high-speed rail, 5G infrastructure, supercomputing, quantum computing, and Artificial Intelligence (AI). The centralized nature of Chinese decision-making allows for rapid deployment of resources at a scale and speed that fragmented European systems struggle to match.
Technology Transfer and Market Leverage: China strategically leveraged its massive domestic market as a condition for foreign companies to operate, often requiring technology transfer to local partners through joint ventures and other arrangements. While European companies benefited economically from access to the Chinese market, this engagement inadvertently accelerated the rise of Chinese competitors who absorbed foreign technology, improved upon it, and eventually began competing not only domestically but globally.
Fragmented European Market and Governance: The European Union, while possessing a nominally unified market of 450 million consumers, still struggles with fragmented regulatory and investment environments across its member states. Unlike the United States or China, which can mobilize capital and regulation across vast, unified systems, the EU lacks a completed Capital Markets Union and faces persistent barriers to continent-wide industrial strategy. Decision-making processes that require consensus among 27 member states result in delays and dilution of policy ambition. Innovation often struggles to scale up from laboratory to commercial product within Europe, with many promising startups relocating to the United States or China to access capital and unified markets.
Manufacturing Excellence and Supply Chain Dominance: China's relentless focus on optimizing and dominating global manufacturing supply chains, particularly in electronics, machinery, and increasingly Electric Vehicles (EVs), has driven down costs and created competitive advantages that have decimated many comparable European industries. Chinese manufacturing prowess extends beyond simple cost advantages to include sophisticated logistics, rapid iteration, and the ability to scale production at speeds unmatched elsewhere in the world.
Sectoral Dominance: In critical future-oriented sectors like electric vehicles, battery technology, solar panels, and 5G equipment, Chinese companies have established commanding leads. European automotive manufacturers, once the global gold standard, now find themselves playing catch-up to Chinese EV makers like BYD and NIO. The renewable energy sector tells a similar story: Germany, which pioneered modern solar panel technology, has seen its entire domestic solar manufacturing industry collapse, unable to compete with Chinese production capabilities and government support.
The Proposed European Counter: Draghi's Investment Plan
The Diagnosis of European Decline
Former European Central Bank President and Italian Prime Minister Mario Draghi delivered a comprehensive report in September 2024 that provided a sobering assessment of Europe's competitiveness crisis. Draghi warned that if the EU failed to catch up with its rivals, it would face "slow agony," and wrote that the EU "needs far more coordinated industrial policy, more rapid decisions and massive investment if it wants to keep pace economically with rivals the United States and China".
The report identified three priority areas requiring urgent action: (1) closing the innovation gap with the US and China, particularly in high-tech sectors; (2) accelerating decarbonization while reducing energy costs; and (3) increasing security and reducing strategic dependencies, especially in critical raw materials and semiconductors.
Investment Scale and Strategic Focus
Draghi's proposals require substantial resources, estimated at an additional €800 billion annually, which constitutes close to 5 percent of EU GDP. To put this in perspective, this annual investment equals roughly the entire EU Recovery and Resilience Facility that was stretched over six years, and it dwarfs the regular EU budget, which amounts to only about 1 percent of GDP.
The investment is intended to drive a new European industrial policy focused on three strategic areas:
Decarbonization: Massive investments in clean technologies like advanced batteries, hydrogen infrastructure, carbon capture, and modernizing power grids to support renewable energy integration. Europe aims to maintain its leadership in setting global environmental standards while ensuring its industries can compete with heavily subsidized Chinese competitors in green technology markets.
Digitization: Boosting digital infrastructure, computational capacity for AI development, quantum computing capabilities, and technological innovation across all sectors. The report emphasizes the need for Europe to regain control over data and sensitive cloud services, and to build robust financial and talent foundations to support innovation in computing and AI.
Defense: Enhancing Europe's security and industrial capacity in light of the Russian threat and broader geopolitical instability. This includes coordinated defense procurement to replace the current fragmented approach where most spending goes to non-EU suppliers, and developing domestic capabilities in critical defense technologies.
Funding Mechanisms and Political Challenges
The Draghi report emphasizes the importance of completing capital markets union to unlock European savings that exceed US levels but currently have fewer efficient investment outlets. The proposal calls for EU-level public investment to supplement private capital, including measures like the development of Eurobonds—joint debt instruments that would finance long-term competitive investments in R&D, infrastructure, and defense procurement.
However, the proposal faces significant political resistance. Joint EU debt remains controversial, with fiscally conservative member states like Germany and the Netherlands expressing concern about debt mutualization and moral hazard. The concept of "common debt" revives debates from the eurozone crisis, when countries like Germany reluctantly agreed to bailout mechanisms for Greece and other distressed nations.
By September 2025, one year after the publication of the Draghi report, monitoring found that out of 383 recommendations, only 43 (11.2%) had been fully implemented, with 77 (20.1%) partially implemented, 176 (46.0%) still in progress, and 87 (22.7%) untouched. This slow implementation reflects the structural challenges of EU decision-making and the difficulty of achieving consensus on ambitious reforms.
The stakes could not be higher. This proposal is seen as essential for Europe to regain its strategic autonomy and compete effectively with state-driven economies like China and the vast, unified market of the US. Without decisive action, Europe risks permanent relegation to second-tier economic status, dependent on technologies and platforms developed elsewhere, with all the security and sovereignty implications that entails.
China's Diplomatic Offensive on Japan-Taiwan Issue
Exploiting Strategic Independence Rhetoric
China's diplomatic effort to urge France to react to Japan's stance on Taiwan represents a sophisticated strategy to leverage France's unique position within Europe and its historical commitment to strategic independence from the United States. Beijing attempts to link its core interest in Taiwan with the mutual goal of demonstrating strategic vision and independence, as expressed during the Macron-Xi talks.
In recent weeks, China has tried to persuade leaders of the US, the UK, and France to support its position, arguing that "Taiwan's return to China is an integral part of the post-war international order". This framing attempts to position China's territorial claims as aligned with historical justice and international law, while portraying Japan's security concerns as revisionist and militaristic.
Driving Wedges in the Western Alliance
By calling on a major European power like France to oppose a key US ally in Asia (Japan), China seeks to drive a wedge between the EU and the US-led alliance system in the Indo-Pacific. This aligns with China's broader goal of promoting a multipolar world where the US is not the sole global security arbiter and where regional powers like China exercise sphere-of-influence control.
The dispute over Taiwan has become the biggest feud between Japan and China in over a decade. China has employed various forms of pressure, including economic measures such as discouraging Chinese tourism to Japan, where hotel reservations plunged by 57 percent following Takaichi's remarks. China has also taken its case to the United Nations, sending multiple letters to the Secretary-General accusing Japan of violating international norms.
France's Careful Navigation
France is navigating this diplomatically fraught situation with considerable care. On one hand, it adheres to the One-China policy and consistently urges de-escalation and respect for the status quo in the Taiwan Strait. On the other hand, as a G7 member with its own strategic interests in the Indo-Pacific—including territories like New Caledonia and French Polynesia—France has reaffirmed its opposition to any unilateral use of force or coercion to change the status quo, effectively standing with Japan and the US on the fundamental principle of regional stability.
Macron's concept of "strategic autonomy" means France will seek a position independent of both US and Chinese pressure. France aims to be a stabilizing force that can maintain dialogue with all parties while preserving its core principles and interests. However, as the Taiwan issue intensifies and becomes increasingly zero-sum in nature, this middle ground may become harder to maintain, forcing France and Europe to make more explicit choices about which principles and partnerships they prioritize.
Conclusion: Navigating an Uncertain Future
The France-China relationship as demonstrated by Macron's December 2025 visit encapsulates the broader challenges facing Europe in an era of intensifying great power competition. France seeks to maintain a strategic partnership with China based on economic cooperation, cultural exchange, and shared interests in multilateralism, while simultaneously addressing massive trade imbalances, technological deficits, and fundamental disagreements on security issues like Ukraine and Taiwan.
The economic dimension reveals a relationship in serious imbalance, with France running unsustainable deficits and facing industrial competition from an increasingly technologically sophisticated China. Macron's push for Chinese investment and calls for rebalancing represent an attempt to find a sustainable path forward, but success depends on Chinese willingness to open markets and European ability to create competitive conditions for investment.
The geopolitical dimension reveals even deeper tensions. On Ukraine, France and China operate from fundamentally different premises about European security and the acceptable use of force. On Taiwan, France must navigate between its One-China policy commitments, its G7 partnerships, and its broader vision of strategic autonomy. As these issues intensify, France's ability to maintain balanced relations with both China and its traditional allies will be severely tested.
The technological dimension represents perhaps the most existential challenge. Europe's declining competitiveness vis-à-vis China threatens not only economic prosperity but also strategic autonomy itself. Without technological sovereignty in key sectors, Europe risks becoming dependent on external powers for critical capabilities, undermining its ability to pursue independent foreign policy.
The Draghi report offers a roadmap for European revival, but implementing its ambitious agenda requires overcoming deep-seated structural obstacles: fragmented governance, fiscal conservatism, political divisions, and the challenge of coordinating action among 27 diverse member states. The slow pace of implementation one year after the report's publication suggests that Europe has not yet found the urgency or unity necessary to execute transformational change.
As France and China pledged deeper cooperation during the December 2025 visit, the underlying question remains: can they develop a truly balanced and sustainable partnership, or are the structural contradictions—economic, technological, and geopolitical—too profound to bridge? The answer will have profound implications not only for bilateral relations but for the broader architecture of 21st-century international order, determining whether multipolarity means cooperative coexistence or dangerous fragmentation into rival blocs. France's efforts to chart a middle path, maintaining dialogue with China while upholding European interests and values, represents one of the most significant diplomatic challenges of our time.
No comments:
Post a Comment