China-EU ties fall apart

Some German carmakers are more dependent on sales in China than the U.S. [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( It was supposed to be an opportunity to dial down tensions and help stop the bloodshed in Ukraine. Instead, a virtual summit between the European Union and China signaled a breach in relations between two economic giants. The EU went into the meeting with a single priority: persuading Beijing to use what President Xi Jinping has called its “limitless partnership” with Russia to intervene with Vladimir Putin. Key reading: - [Alarmed by Russia’s Aggression, Europe Rethinks Its China Ties]( - [China Warns U.S. Over Forming Pacific NATO, Backing Taiwan]( - [Xi Risks Leaving China Isolated by Backing Putin to Counter U.S.]( - [U.S. Views of China Worsen as Xi Maintains Ties With Russia]( - [Czechs Warn China Its Endorsement of Russia Will Erode EU Ties]( But what the summit actually achieved was to show how the war is pushing China and Europe further apart. The EU’s foreign policy chief, Josep Borrell, characterized the April 1 talks as “a dialogue of the deaf.” Facing up to Moscow’s aggression and the need to rapidly unwind dependence on Russian energy, built up over decades, European governments are beginning to see the danger in repeating the mistake with another authoritarian regime. That’s causing officials in capitals from Rome to Berlin, Brussels and Prague to reassess their individual and collective relations with China. Foreign Minister Gabrielius Landsbergis of Lithuania, the Baltic nation that tussled with Beijing over Taiwan, the island democracy China regards as its territory, describes the dawning realization as “the awakening of the West.” China overtook the U.S. as the EU’s largest trading partner in 2020, with a total volume worth some $868 billion last year. Some German carmakers are more dependent on sales in China than America. That level of reliance is starting to ring alarm bells, especially as the war further snarls fragile supply chains. China’s Covid Zero policy adds another layer of unpredictability. The EU categorizes China as a partner, a competitor and a rival. Beijing’s inaction on the war means that systemic EU-China rivalry is here to stay.— [Alan Crawford]( Xi and European Commission President Ursula von der Leyen during the EU-China Summit. Photographer: Anadolu Agency/Anadolu Agency Sign up [here]( for the Special Daily Brief: Russia’s Invasion of Ukraine and click [here]( for this week’s most compelling political images. Global Headlines Artillery barrage | In the mythology of Ukraine’s resistance against Russia, infantry armed with shoulder-fired anti-tank missiles have played the starring role. Yet, as [Marc Champion]( and [Aliaksandr Kudrytski]( report, old-fashioned [artillery]( has a central function in decisive wins, which is why Ukraine’s allies are ramping up deliveries of heavy guns. - U.S. President Joe Biden has broad support in Congress for a $33 billion Ukraine aid package, but the proposal risks getting [tangled](in a long-simmering partisan dispute over immigration and Covid-19 funding. - Germany signaled it [wouldn’t oppose]( a EU embargo on Russian oil, but expressed skepticism that it’s the most effective means of damaging Putin. Destroyed Russian armored vehicles in Bucha, Ukraine, on April 4. Photographer: SOPA Images/LightRocket Power play | Qatar’s status as a much-coveted gas supplier [promises]( to turn the tiny Gulf state into the bigger player it always aspired to be as Europe looks to wean itself off dependence on Russia. [Paul Wallace]( and [Simone Foxman]( report that several top EU officials have flown to Doha in recent weeks, all with a clear message: We need your gas as fast as possible. Economic pump | China’s top leadership vowed to [boost]( economic stimulus and contain the country’s worst Covid outbreak since 2020 as it threatens official growth targets for this year. The Communist Party’s Politburo, led by Xi, pledged to “strengthen infrastructure construction in an all-around way” and to support the housing market. - Who [pays]( the price for the current Covid crisis will show how strong a grip Xi has over the Communist Party heading into a crucial leadership reshuffle. Best of Bloomberg Opinion - [Putin’s Gas Strategy Gives Germany Only Bad Choices: Javier Blas]( - [Sri Lanka Should Cancel Its Central Bank: Andy Mukherjee]( - [This Stimulus Is the Last Thing China Needs: David Fickling]( War fallout | Europe’s largest economies began 2022 on a weak [footing]( — underscoring the damage from soaring energy costs and worsening supply snarls following Russia’s invasion of Ukraine. Germany narrowly avoided a recession, while France stagnated, Italy’s economy shrank and Spain’s slowed more than anticipated. Another round of sanctions — including a possible ban on Russian oil imports — risks hammering industry. Explainers you can use - [Why Putin’s Demand for Rubles Has Europe Scrambling]( - [All About Paxlovid and Other Covid-19 Treatments]( - [The World Has Been Losing 10 Soccer Fields of Tropical Forest a Minute]( Late surge | Leni Robredo is attracting some of the biggest pre-election crowds in decades in the Philippines as the lone female candidate seeks to pull off a stunning [upset]( against frontrunner Ferdinand Marcos Jr. in the May 9 presidential election. But as [Ditas Lopez]( and [Andreo Calonzo]( explain, it may be too late, with a poll last month showing her trailing by more than 30 percentage points. Leni Robredo during a campaign rally in Pasay City on April 23. Photographer: Veejay Villafranca/Bloomberg Bloomberg reporters around the world discuss a key political issue in our weekly Twitter Space. This week we focused on Europe’s unity in the shadow of war, Russia’s threats to cut off gas flows, and what we might expect from Emmanuel Macron’s second term. You can listen [here](. News to Note - Turkish President Recep Tayyip Erdogan met Saudi Arabia’s de facto ruler, the strongest sign yet of a [turnaround]( in relations since the 2018 murder of a prominent Saudi critic in Istanbul. - Sinn Fein looks set to become the largest party in Northern Ireland’s assembly, potentially marking a [historic]( shift in the region’s political balance, according to a final poll ahead of next week’s election. - British Virgin Islands Premier Andrew Fahie was [arrested]( in Miami on suspicion of trying to help a presumed drug trafficking organization smuggle thousands of kilos of cocaine into the U.S. And finally ... Earthquakes weren’t something that people in the western part of the U.S. state of Texas used to think much about. That has changed since oil crews started drilling frantically in the region’s vast Permian Basin, injecting waste water into the ground and triggering tremors. Now the area is on the cusp of becoming the earthquake [capital]( of America. And with Putin’s war sending crude prices skyrocketing over $100 a barrel, it’s likely to get worse. Pumpjacks located in the middle of a residential neighborhood in Midland, Texas, on April 4. Photographer: Jordan Vonderhaar/Bloomberg Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022