World
Xi's European tour: Some euro, no vision
The opinions expressed in this article are those of the author and do not represent in any way the editorial position of Euronews.
For China to revive its fortunes, it must fundamentally change course, abandoning its version of predatory state capitalism in favour of the genuine market reforms its trade partners worldwide are calling for, Elaine Dezenski writes.
Xi Jinping arrived in Europe earlier this week lugging some heavy economic baggage.
With foreign direct investment into China plunging 82% to just $33 billion (€30.5bn) in 2023 — a three-decade low — one might have expected Xi’s tour to be a full-fledged charm offensive aimed at wooing back skittish European investors and businesses.
However, the authoritarian leader’s trip was anything but charming.
Rather than candidly address the headwinds battering China’s economy and appease anxious trading partners, Xi doubled down on the same tone deaf tactics that have defined his authoritarian rule for over a decade.
Cosying up to the like-minded regimes in Hungary and Serbia, Xi offered limited compromises on China’s aggressive trade practices. This hardline posture underscores Xi’s fundamental inability to relate to major market economies as an equal partner respecting fair competition.
For China, the results have been disastrous. The fact that the US has now surpassed China as Germany’s largest trading partner lays bare the costs of Xi’s inflexible approach.
Germany has been one of China’s more reliable European partners — this shift, however, shows the extent of Europe’s growing rejection of China’s hegemonic ambitions.
A bad call at a bad time
With a looming demographic crisis at home and a faltering real estate sector, China needs its top export markets — the US and Europe — more than ever. But authoritarians don’t make a habit of offering concessions or leading with a spirit of compromise.
Xi had a prime opportunity on this European tour to chart a new course, one oriented around economic liberalisation, market reforms, supply chain transparency, and fair competition.
Instead, he chose the path of confrontation towards vital European trading partners while cosying up to Europe’s authoritarian eastern flank.
This represents an untimely miscalculation. By ignoring the reasonable concerns of Europe’s leading economies, Xi has squandered an opportunity to help stave off potential economic implosion at home.
Foreign capital will continue fleeing, spooked investors won’t return, and European markets will become increasingly inaccessible so long as Beijing maintains its predatory trade practices.
Respect the rules of the market you need
The reality is that while China’s domestic market remains important, the number of foreign firms deriving profits there appears to be shrinking.
According to a report from the McKinsey Global Institute, multinational corporations’ “share of all revenues earned in China declined from 16% to 10% from 2006 to 2020.”
For many, the Chinese market has become an empty promise. The European Union Chamber of Commerce in China’s latest survey shows record-low business confidence in the Chinese market.
In fact, a record share of respondents doubted their profitability in China. In the US, as well, less than half of companies responding to an American Chamber of Commerce in China survey indicated they expect to be profitable in 2024.
Xi had an opportunity to change the tides with respect to investment in China. He could have addressed the pressing needs of his European trading partners with humility and opened the door to renewed economic cooperation.
Unfortunately for the Chinese people, returning to robust commerce with Europe and North America’s major economies would require the flexibility and respect for market principles that Xi’s authoritarian mindset renders him incapable of delivering.
ADVERTISEMENTWith foreign capital fleeing, property values falling, youth unemployment surging, and indebtedness soaring, China is in desperate need of a win for its export-driven economy.
The status quo won’t fly any more
On this trip, European Commission President Ursula von der Leyen bluntly conveyed the EU’s demands for fair economic competition with China and its willingness to robustly defend its interests against Beijing’s unfair trade practices.
In response, Xi bluntly denied the basis for Europe’s concerns, claiming, “The so-called ‘problem of China’s overcapacity’ does not exist, either from the perspective of comparative advantage or in light of global demand.”
This builds on the ES’s 2019 designation of China as a “systemic rival” and should be understood in China for what it is: a clear warning that the status quo is no longer acceptable.
By doubling down on authoritarian belligerence, Xi demonstrated a lack of vision for productive European engagement.
ADVERTISEMENTFor China to revive its fortunes, it must fundamentally change course, abandoning its version of predatory state capitalism in favour of the genuine market reforms its trade partners worldwide are calling for.
By ignoring Europe’s call for change, Xi has ensured darker economic days ahead for the Chinese people.
Elaine Dezenski is senior director and head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies, a non-partisan think tank based in Washington, DC.
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The United Kingdom on Monday blamed an Iran-linked proxy group for a string of antisemitic arson attacks targeting British Jewish sites, prompting the government to ban Tehran’s powerful Islamic Revolutionary Guard Corps and impose sweeping new powers to crack down on foreign-backed sabotage.
British officials said the Islamic Movement of the Companions of the Right (IMCR) publicly claimed responsibility for seven attacks this year targeting Jewish and Israeli-linked locations, as well as a Persian-language media outlet critical of Iran’s government. According to the U.K. government, members of the IRGC’s elite Qods Force were “almost certainly” directing the group’s operations across Europe.
The attacks included fires at synagogues, Jewish charity ambulances and other Jewish community sites in London. No injuries were reported.
DESANTIS ANNOUNCES PLANS TO USE NEW STATE LAW TO TARGET DOZENS OF ALLEGED TERRORIST GROUPS
Britain’s Prime Minister Keir Starmer hosts a reception with the Jewish community to discuss efforts to tackle antisemitism, at Downing Street, in London, July 13, 2026. (Reuters/Suzanne Plunkett/Pool)
Prime Minister Keir Starmer said the new measures send a clear message to foreign adversaries seeking to sow violence.
“We will never let Britain be a playground for states who want to spread fear, division and violence on our streets,” Starmer said. “Anyone acting on behalf of those who threaten our national security should be in no doubt that there is no place for you in Britain.”
Britain’s Prime Minister Keir Starmer discusses efforts to tackle antisemitism at Downing Street in London, Monday, July 13, 2026. (Suzanne Plunkett/Pool Photo via AP)
If Parliament approves the designations later this week, anyone carrying out acts of sabotage — including arson — on behalf of the IRGC, IMCR or Russia’s GRU Volunteer Corps could face life imprisonment. Supporting or assisting the groups could carry prison sentences of up to 14 years.
The British government said the new authorities, created under the National Security (State Threats) Act 2026, will make it easier for prosecutors to secure convictions because they will no longer have to prove a direct foreign government connection in every case.
Home Secretary Shabana Mahmood accused both Tehran and Moscow of relying on criminal proxies to conduct hostile operations inside the United Kingdom.
“Iran and Russia are using proxies and thugs to do their dirty work on our shores,” Mahmood said. “I have rapidly designated three groups so those working for them will be tracked down and put behind bars.”
ISRAEL FORTIFIES BORDER WITH JORDAN AS IRAN SEEKS NEW TERROR PATH
The government said IMCR emerged online earlier this year and has also claimed responsibility for attacks on synagogues in Belgium and the Netherlands. British intelligence officials say Iran-backed proxy groups have increasingly recruited members of criminal organizations to carry out sabotage, intimidation and physical attacks across Europe, often targeting Jewish communities and Iranian dissidents.
Charred remains of ambulances belonging to Hatzola, a Jewish community organization, which were set on fire in an incident that the police say is being treated as an antisemitic hate crime, in London, March 23, 2026. (Hannah McKay/Reuters)
According to the U.K., MI5 identified at least 20 potentially lethal Iran-backed plots against individuals in Britain over the past year. The government has already sanctioned more than 550 Iranian-linked individuals and entities and has pledged £250 million ($334,662,500) over three years to strengthen security for Jewish communities, including increased protection for synagogues, schools and community centers.
Britain also designated Russia’s GRU Volunteer Corps, saying the group acts as a proxy for Russian military intelligence by recruiting individuals online to conduct sabotage, arson and other hostile operations.
The crackdown comes just weeks after two Romanian men were sentenced to prison for stabbing a journalist working for a Persian-language television station in London, an attack a British judge said was carried out on behalf of the Iranian state.
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Iran did not immediately comment on Monday’s announcement, according to The Associated Press.
The Associated Press contributed to this report.
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The European Union has sanctioned VK Company, which dominates Russia’s online sphere, for colluding with the Kremlin to identify critics of the full-scale invasion of Ukraine and curtail access to independent sources of information.
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VK Company runs VKontakte, the country’s most popular social media site. Often described as “the Russian Facebook”, it has an estimated 70 million users.
The decision, taken on Monday by foreign ministers, points the finger at VK Company and an associated firm for developing and managing Max App, which is state-backed and comes pre-installed on all phones and tablets sold in Russia.
Citing experts, Brussels argues that Max App has “extensive surveillance features” that Russian authorities use to track online communications, gather data, monitor address books, identify user location and install autonomous updates.
The imposition of Max App has helped the state crack down on competitors, such as WhatsApp, Instagram and Telegram, and on VPNs, the private networks that Russians employ to bypass increasingly stringent state restrictions on the Internet.
“VK has cooperated with Russian authorities in their repressive actions, including by providing them with data concerning users of its services who posted content criticising Russia’s war of aggression against Ukraine, or other content banned by the authorities,” the legal text says.
“VK has also participated in the government-ordered ban on the use of VPNs, through which Russian internet users could previously access independent content.”
Monday’s decision introduces an asset freeze and prohibits EU companies from making funds available to VK Company. In a statement to Russian state-owned media outlet TASS, the firm said that its applications and services remained “available to users as normal”.
Besides VK Company, the EU also sanctioned Citadel, VAS Experts and Norsi-Trans, three companies that provide hardware and software for the so-called System of Operative Investigative Measures that Russian authorities use to track online communication and target journalists, opposition figures, minority groups and ordinary citizens.
The restrictions were adopted under a special regime dedicated to punishing human rights violations.
Separately, the EU sanctionednine individuals and four entities accused of carrying out “malicious” cyber attacks against several member states.
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