European Commission President Ursula von der Leyen called for an "essential" rebalancing of trade ties with China during a tense summit on Thursday with President Xi Jinping, saying ties stood at an "inflection point", according to a pool report.
Expectations were low for the summit marking 50 years of diplomatic ties after weeks of escalating tension and wrangling over its format, with the duration abruptly halved to a single day at Beijing's request.
Von der Leyen and European Council President Antonio Costa met Xi at the start of an event set to be dominated by thorny issues ranging from trade frictions to the Ukraine war.
"As our cooperation has deepened, so have imbalances. We have reached an inflection point," von der Leyen told Xi during the meeting in the Great Hall of the People.
She was referring to the EU's trade deficit with China, which ballooned to a historic 305.8 billion euros ($360 billion) last year.
"Rebalancing of our bilateral relation is essential ... It is vital for China and Europe to acknowledge our respective concerns and come forward with real solutions."
However, Xi urged the EU to "make correct strategic choices" during the meeting, state broadcaster CCTV said, in a veiled criticism of Brussels' hawkish stance on China.
"The more severe and complex the international situation, the more China and the EU must strengthen communication, enhance mutual trust and deepen cooperation," Xi told von der Leyen and Costa, it said.
"Chinese and European leaders should ... make correct strategic choices that meet the expectations of the people."
The weeks before the summit were dominated by tit-for-tat trade disputes and hawkish European rhetoric, such as a July 8 accusation by von der Leyen that China was flooding global markets as a result of its overcapacity and "enabling Russia's war economy".
Shortly before the summit, however, von der Leyen struck a more conciliatory tone, describing it as an opportunity to "both advance and rebalance our relationship" in a post on X on Thursday.
"I'm convinced there can be a mutually beneficial cooperation," von der Leyen added.
The two EU officials are set to meet Chinese Premier Li Qiang later. Both sides are hoping to reach a modest joint statement on climate, currently one of the only bright spots in EU-China cooperation.
State news agency Xinhua also appeared to downplay Beijing's rivalry with the 27-member bloc, saying China was a "critical partner" for Europe, with a range of shared interests.
"China is a critical partner to Europe, not a systemic rival," it said in a commentary.
The two shared interests in trade, climate, and global governance, it said, adding, "These areas of common ground should not be eclipsed by isolated points of friction."
The EU defines China as a "partner, competitor and systemic rival", which frames its strategic approach to China policy.
At the summit, European leaders are also expected to raise topics such as electric vehicles and Chinese industrial overcapacity.
China launched rare earth export controls in April that disrupted supply chains worldwide, leading to temporary stoppages in European automotive production lines the following month.
But its exports of rare earth magnets to the EU surged in June by 245% from May, to stand at 1,364 metric tons, though that was still 35% lower than the year-earlier figure, customs data showed.
The EU is likely to seal a trade deal with the United States for a broad tariff of 15% on its exports after intense negotiations, avoiding a harsher 30% figure threatened by President Donald Trump.
