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

By Elizabeth Pineau and Leigh Thomas

PARIS (Reuters) -French President Emmanuel Macron and EU Commission chief Ursula von der Leyen urged China to ensure more balanced trade at the start of President Xi Jinping's visit to Paris, during which Macron was also set to press 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.

Macron said Europe and China needed to resolve structural difficulties, in particular on trade.

"The future of our continent will also very clearly depend on our capacity to further develop in a balanced way our relationship with China," he said as the three sat at a round table under the gilded ceilings of the Elysee Palace.

Von der Leyen was more blunt, saying the relationship was hurt by unequal market access and Chinese state subsidies.

After the meeting, she told reporters that the EU "cannot absorb massive over-production of Chinese industrial goods flooding its market".

"Europe will not waver from making tough decisions needed to protect its market," she said.

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 would 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 and that both should stay committed to the partnership.

"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.

NOT UNIFIED

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 could legitimately support their domestic industries, but any such policies had 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 also hopes to push to open the Chinese market for its agricultural exports and resolve issues around the French cosmetic industry's concerns about intellectual property rights, officials said. China, meanwhile, may announce an order for around 50 Airbus aircraft during Xi's visit.

France is also set to nudge China into pressuring Moscow to halt operations in Ukraine, with little progress apart from Xi's decision to call Ukrainian President Volodymyr Zelenskiy for the first time shortly after Macron visited Beijing last year.

(Reporting by Elizabeth Pineau, Tassilo Hummel, Geert de Clercq, Leigh Thomas, Ingrid Melander and Gabriel Stargardter in Paris, Sudip Kar-Gupta in Brussels, Ryan Woo, Laurie Chen and Ethan Wang in Beijing; additional reporting by Andrew Gray in Brussels; Writing by Ingrid Melander; Editing by Stephen Coates, William Maclean and Nick Macfie)