Welcome to Red Thread, Euractiv’s weekly newsletter on the EU’s relationship with China and the wider Asia-Pacific.

I’m Christina Zhao in Oceania, joined by Anupriya Datta in Europe.

This week, we look at why the European Parliament is reopening ties with Beijing...

After eight years of diplomatic frost, European Parliament lawmakers are returning to China – not expecting agreement, but to better understand how it works.

A delegation of MEPs arrived this week for the first official visit since 2018, reopening a channel that collapsed under the pandemic and Beijing’s sanctions on European lawmakers in 2021. More trips are already planned throughout the year, signalling a steady, if cautious, resumption of contact.

Beijing is already shaping the narrative. Chinese officials and state media, including Global Times, have framed the visit as an opportunity for European lawmakers to gain “firsthand exposure” to Beijing’s economic model and technological development, arguing that “enhanced understanding” could move them beyond “entrenched biases.”

Coverage in Guancha went further, calling it a “quiet victory” for Chinese diplomacy.

The nine-member group, led by Internal Market Committee chair Anna Cavazzini, has held talks with Chinese officials, pressing them over a surge of unsafe and non-compliant products entering the EU.

More than 5.8 billion low-value parcels entered the bloc last year, over 90% from China. The delegation is due later this week to meet executives from Shein, Alibaba and Temu.

Cavazzini cast the visit in protective terms, warning that the EU’s internal market cannot be “overflooded” with dumped goods and insisting Chinese platforms meet European standards. The message is clear: engagement does not mean concession.

Understanding, in this relationship, is a form of leverage. After years of friction with the European Commission, Beijing has in recent months shifted its lobbying efforts towards Parliament, where EU laws are shaped, amended and, at times, softened.

For some in Strasbourg, the logic resonates. Renew MEP Engin Eroglu, who chairs the European Parliament’s China delegation, has argued policymakers need to “step out of our EU bubble” and see China up close.

None of this signals a thaw. Parliament remains one of the EU’s most hawkish institutions on China, and several MEPs are still under Chinese sanctions. Even as contacts resume, the economic relationship is hardening.

German Chancellor Friedrich Merz floated the idea of a future trade deal last week, only for Brussels to swiftly shut it down, insisting Beijing must first address "distortive market practices."

Still, the visits will continue.

If they are unlikely to resolve the structural tensions between Brussels and Beijing, they point to something both sides still share. For all their political differences, the EU and China are, in different ways, knowledge-first systems – treating learning not as an abstract virtue, but as a tool of power.

Orbán’s remarks resonate in Beijing

Chinese state media has seized on remarks by Hungarian Prime Minister Viktor Orbán declaring it “impossible” to beat China, casting his comments as evidence that parts of Europe are waking up to a multipolar world.

In an interview highlighted by Global Times, Orbán argued that global politics will have “at least two suns,” urging Western countries to shift from confrontation to coexistence, framing China’s rise as both inevitable and historically rooted.

The message fits neatly into Beijing’s narrative that rivalry with China is futile, and Europe’s real choice is how, not whether, to live alongside it.

Close friends: China is Hungary’s largest trading partner outside the EU, and in 2023-24 it was the biggest destination for Chinese foreign direct investment in the bloc.

Macron courts Tokyo, eyes minerals

President Emmanuel Macron’s visit to Tokyo this week has tightened coordination between Japan and France.

Meeting Prime Minister Sanae Takaichi, the two leaders agreed to work together on efforts to end the US-Israeli war with Iran and reopen the Strait of Hormuz, a critical artery for global energy flows. With the conflict now in its fifth week, both countries face rising import costs and the risk of supply disruption.

The talks also underscored a shared push to reduce reliance on China for critical minerals. Paris and Tokyo are expected to set out a roadmap to diversify rare earths supply chains, including a planned refining project in southwestern France and closer public-private cooperation.

A lifelong Japanophile: Macron posted on X a Studio Ghibli poster gifted by director Hayao Miyazaki, writing: “‘Porco Rosso’ stands against the violence and brutality of the world, upholding an unwavering ideal of freedom.”

Chinese companies eye EU growth

Chinese state media is projecting confidence in Europe despite rising regulatory pressure.

A report highlighted by Xinhua, the official Communist Party press agency, claims nearly 80% of Chinese companies operating in the EU plan to expand investment over the next three years, with firms increasingly shifting towards an “in Europe, for Europe” model – localising production, supply chains and operations.

At the same time, the report flags mounting frustration with EU policy, with more than half of surveyed companies citing regulatory uncertainty as their top concern. Chinese officials used the findings to call on Brussels to curb “protectionism,” ease restrictions and provide a more predictable business environment, framing deeper engagement as mutually beneficial despite growing trade tensions.

Should Europe care? Chinese investment in the EU is small, even if it looms large politically, at about 0.7% of total foreign direct investment stock in the bloc, far below countries like Japan, which account for several times Beijing’s share.

European space company courts India

Franco-British satellite operator Eutelsat is in talks with the Indian Space Research Organisation over future launches, as it seeks to reduce reliance on SpaceX, the company told Euractiv’s Théophane Hartmann.

The move further strengthens space ties between France and India as they seek to challenge Starlink, with India Today describing India as having a “growing influence” as a cost-effective hub for high-tech space missions.

Europe must learn to fight: ECFR

A new paper by the European Council on Foreign Relations argues Europe has learnt the wrong lesson from its latest clash with China: de-risking is not deterrence.

When Beijing weaponised its dominance over rare earths in 2025, forcing firms to hand over sensitive data just to keep supply chains alive, it exposed a brutal reality. Europe wasn’t at the table when Washington and Beijing struck a temporary truce, yet its defence industry, clean tech ambitions, and manufacturing base remain deeply exposed to Chinese chokeholds.

The authors’ core warning is blunt: the EU must learn how to fight for itself. Europe doesn’t lack leverage; it lacks the will and strategy to use it. In an era of “confrontational geoeconomics,” China has formalised its coercion toolkit, from export controls to sanctions regimes, and is increasingly confident in deploying it. Meanwhile, Brussels is still playing defence.

The EU’s system of geographical indications – once criticised as protectionism – is gaining global traction, with countries such as Australia agreeing to recognise hundreds of protected European food names as part of recent trade negotiations.

As more partners adopt similar frameworks, Brussels is increasingly exporting a model that blends market access with cultural protection, even as the US continues to resist it as a barrier to trade.