EU Says China Trained Russian Troops as Bloc Weighs Tougher Stance on Beijing

DATA & FIGURES

The EU has sanctioned several Chinese entities, including Xinxiang Richful Lubricant Additive Company, Shenzhen Minghuaxin, and Nord Axis Ltd of Hong Kong, for aiding Russia's military. The EU recorded its largest ever trade deficit of EUR360 billion (US$418 billion) with China in 2025, which is seen as unsustainable. The EU has also paused restrictions on Chinese chipmaker Yangzhou Yangjie Electronics until December 31, 2026, and March 16, 2027, to allow European carmakers to complete existing orders.

THE SCENARIO

The geopolitical stand-off between the EU and China has been compounded by a running dispute over trade, which has worsened in recent months. The EU is seeking to de-risk ties with China and protect its market from unfair practices, while China insists that it is neutral in the Ukraine war. The EU leaders will discuss whether a new trade strategy is required to deal with the market-distorting impact of China's industrial overcapacity, state subsidies, and a devalued currency.

DIRECT QUOTE

"From distorting subsidies, growing trade imbalances, and a near monopoly of critical raw materials, the list of issues remains long. Reducing dependencies with China won’t be easy or cheap, but it’s necessary and urgent." — Kaja Kallas, EU Top Diplomat

BBN INSIGHT

The EU's decision to sanction Chinese entities and pause restrictions on Yangzhou Yangjie Electronics reflects the bloc's growing concerns about China's role in the Ukraine war and its unfair trade practices. The EU's push to de-risk ties with China is driven by a desire to protect its market and reduce dependencies on Chinese goods. However, this approach may lead to a trade war, which could have significant economic implications for both the EU and China.