Prospects for EU-China deal poor in final hours before summit

Expectations are low for the 25th EU-China Summit kicking off Thursday in Beijing.

ICYMI: Planning for this summit has gone from bad to worse.

• In April, it was rescheduled and relocated to Beijing after Xi Jinping reportedly refused an invitation to Brussels.
• By June, EU officials had scrapped an economic and trade dialogue that was meant to lay groundwork for the summit.
• In July it was reported that plans for a second day of meetings were scrapped.
• Meanwhile, seemingly insurmountable trade tensions continue to grow.

Despite this bleak picture, the two sides have found agreement on some issues:

• China recently dropped sanctions on EU policymakers and offered major carveouts exempting French cognac makers from tariffs.
• The two sides also held friendly climate talks earlier this month.

But don’t get your hopes up: Beijing and Brussels have polar opposite views on what they want out of the relationship.

• China wants the EU to back off on tariffs, especially for electric vehicles – but the EU is desperate to protect its industrial base.
• China also wants the EU to reduce barriers to trade and investment – even as Brussels seeks to rebalance its trade relationship with China.

Get smart: There are a wide range of possible outcomes from the EU-China Summit.

• It’s possible that the two sides reach a trade deal or some other agreement that improves relations – such as fast-tracking critical minerals export licenses to the EU.
• But given growing frustrations on both sides, a total diplomatic meltdown is also not out of the question.