As tensions between China and the European Union increase, German Chancellor Olaf Scholz met with various Chinese officials this week, including President Xi Jinping, in efforts to strike a "delicate" balance, promoting business ties while addressing concerns over China's surging export volumes to Europe and its support for Russia in their ongoing conflict with Ukraine.

During the discussions, Scholz echoed broader European apprehensions about China's growing presence in the European market, particularly regarding the influx of Chinese goods sold at potentially unsustainable prices. Scholz's critique of China's industrial capacity also aligns with U.S. concerns, following recent statements on China's overcapacity expressed by U.S. Treasury Secretary Janet Yellen during her latest diplomatic visit to Beijing.

However, some experts argue that Western criticisms of China's surplus production ignore historical instances of Western nations using surplus goods for economic gain. They also question the narrow definition of overcapacity and the consistency of trade policies across borders.

Jens Eskelund, President of the European Chamber in China, also recently said that while worries about trade in both countries were legitimate, there was a risk of unproductive decoupling and a full trade war if European and Chinese leaders don't increase dialogue.

Meanwhile, San Francisco Mayor London Breed is the latest U.S. politician to visit China to promote business ties and people-to-people exchanges. On Thursday, she joined wildlife protection officials in Beijing to announce that the San Francisco Zoo has been selected to receive a pair of giant pandas. The announcement comes before Secretary of State Antony Blinken's visit to China next week, as the two countries work to ease tensions and foster dialogue.

For more on China-U.S. relations and beyond, catch up on our latest Focus content, including topics on EV manufacturing, Beijing and Washington's impacts on ASEAN, and TikTok, as well as our recent Digest magazine: Navigation Relations, with exclusive commentaries from Joseph Nye, Jia Qingguo, Charlene Barshefsky, and more.