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On monetary, commercial and financial policy, Brussels starts to stand up to Beijing

Port of Shanghai

It is a rare enough event to merit due attention: Brussels may actually have found consensus on a major issue. It's not the financial security of European Union states or harmonizing corporate taxes or even the future of European energy that has created this unusual convergence. It's about an even more important matter: the EU's relationship with China, its number one goods supplier since 2006. This new policy can be stated in a single word: reciprocity.

A year ago, European leaders went to China to call for monetary reciprocity. Instead of being controlled by Beijing, the value of the yuan should be subjected to the hazards of the market like all other major currencies. Then last month, the European Commission broached the topic of commercial reciprocity for public tenders. The EU suggested that the Chinese should no longer have access to European public contracts if China doesn't open its projects to foreign investors. Yesterday, the European Commissioner in charge of Industry, Antonio Tajani mentioned financial reciprocity: the EU could prevent Chinese firms from buying out European companies in the name of strategic interests, just like Beijing prevents foreigners from buying their national companies.

This last point is the most essential. Until now, Chinese investors have spent little in Europe, buying only second-class symbols like Choco BN, Volvo or the port of Piraeus. But they will gain momentum. When they get tired of buying American public bonds, an increasingly dodgy product, they will turn to stocks. And they will prefer the European market, more open than the American one, which is under the supervision of the Committee on Foreign Investment in the US (created in 1975 to prevent petro monarchies from acquiring American industrial gems and reinforced in 1988 to counter Japanese attacks.)

And the Chinese have the means. With their foreign exchange reserves, they have enough capital to buy in one fell swoop all of the companies listed on the Paris stock exchange. Europeans must find an answer to this upcoming offensive. Tajani was right to raise the issue (even though as an Italian, he may have been thinking of Italian cable maker Prysmian, a cable maker that is competing with Xinmao to buy Dutch firm Draka).

But not even the reciprocity requirement will be enough. Brussels will have to create solid principles to prevent both naivety and overprotection of European firms. This ultimately moves us out of the realm of economics, and into politics.

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The Royal Mint unveiled the first coins featuring the portrait of King Charles

Chloé Touchard, Lisa Berdet, Lila Paulou and Anne-Sophie Goninet

👋 Akkam!*

Welcome to Friday, where an attack on a line of civilian cars kills at least 25 in Ukraine, a suicide bomb attack in Kabul leaves 23 dead, and the first coins with King Charles’ portrait are unveiled. Meanwhile, Timour Ozturk reports from Istanbul for French daily Les Echos on how the historic Turkish city becomes the prime destination for Russians fleeing military conscription.

[*Oromo, Ethiopia]

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