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Xi says trust me, as Europe wrestles with how to handle China

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Emmanuel Macron, France's president, centre leaving a meeting with Xi Jinping, China’s president, left, and Angela Merkel, Germany’s chancellor, at Elysee Palace in Paris, France, on Monday, March 26, 2019.

[PARIS] As Europe struggles to come up with a coherent position on China, President Xi Jinping has a suggestion: just trust Beijing.

Xi sought to lay to rest suspicions about his global plans at talks with European leaders in Paris on Tuesday amid mounting concern over China's growing influence, predatory investments and possible hacking of 5G data networks. On Monday, the Chinese delegation announced a US$35 billion jet order for Airbus SE, the joint European planemaker, as a sign of goodwill.

"We cannot let mutual suspicion get the better of us," Mr Xi said at a joint press conference with French President Emmanuel Macon, Germany's Angela Merkel and European Commission President Jean-Claude Juncker. "We must not always be guarded against each other and worry that they may do something behind our back. That is very important. That is something we need to avoid."

The Chinese president landed in Italy last Thursday with a delegation of some 500 executives, officials and journalists as EU leaders were gathering in Brussels for a summit where they pledged to coordinate their policies toward Beijing. A week earlier the commission had issued a call for greater reciprocity and warned that China is both a partner and a strategic competitor.

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China's rise has caused "deep tensions" that pose a threat to the global trading system, Mr Macron said at the briefing. "None of us is naive, but we respect China and we're determined to have dialogue and cooperation."

On Saturday, Italy brushed off the concerns about China's increasing reach and influence to sign up to the Belt and Road Initiative, China's giant infrastructure project to redraw the global trade map. Austrian Chancellor Sebastian Kurz is heading to Beijing next month for talks on potentially following suit.

The prospect of trade and investment from China is a powerful incentive that has strained ties between EU members.

At last week's meeting, several EU leaders voiced concerns that EU countries shouldn't be allowed to be bought off individually, according to one official briefed on the talks.

Richer members from the west criticized those in the east who are considering following Italy's decision, several officials said. The eastern nations responded that it's the west that has won almost all of the trade and investment from China. Still, the tensions weren't as great as some had feared, the officials said.

Mr Macron meanwhile rolled out a lavish welcome for Xi in Paris - rivaling the reception from horseback guards he'd received last week in Rome.

The Chinese president was greeted by a military ceremony under the Arc de Triomphe, before the two leaders rode almost a mile together down the Champs Elysees. Two hours later, Mr Macron beamed as Chinese authorities announced the purchase of 300 Airbus planes. "It was an excellent symbol," the French president said.

Mrs Merkel sought to put a more positive spin on Europe's tougher rhetoric.

"From my perspective, the term ‘strategic competition' has a positive connotation, because it means that everyone has to make an effort to bring their skills and achievements to this competition," she said.

Germany's EU partners are seeking to beef up their relationships with Beijing after seeing Berlin claim the largest slice of Europe's trade with China.

Mr Macron's advisers say one of their main goals with Mr Xi's visit is to boost France's commerce with the world's most populous country. And Italian authorities are irked that Chinese companies invest more than twice as much in France as they do in Italy, even as the French lecture them Italy about getting too close to Beijing.

France may not want to be officially associated with China's new Silk Road, but French newspapers such as Le Parisien Monday carried Chinese-backed full page ads bragging that since 2016 there have been almost weekly arrivals of freight trains in Lyon coming straight from China loaded with sporting goods and electronics, with wines, car parts, and medicines going the other way.

"Your visit comes at a time when the EU is making choices," Mr Macron told Mr Xi before a state dinner in Paris on Monday night. "Europe must be united and have a coherent strategy in the dialogue it's establishing with China."

BLOOMBERG