Spain and China are cosying up – to the anger of many in the EU

ByKatya Adler Europe Editor.

Key points

• Nevertheless, Miguel Otero, China specialist at Madrid's ElCano Royal Institute, accuses Spain's European allies of being condescending and hypocritical.
• Spanish Prime Minister Pedro Sanchez has visited China's President Xi Jinping four times in as plenty of years.
• On his latest trip to Beijing in April, Prime Minister Sanchez met the founder of Chinese wind turbine manufacturer Ming Yang.
• Did Spain distance itself from European allies, or did they distance themselves from us? asks Victor Cortizo, a lawyer and academic specialising in Sino-Spanish relations.
• Shanghai Vice Mayor Lu Shan flew to Barcelona to speak at La Merce's opening ceremony.

While Chinese acrobats elicited gasps of amazement as they rolled, tossed and threw spherical lanterns in the air, keeping – as if by magic – the candle inside them upright at all times, on the streets of Barcelona, fiery red and gold Chinese dragons (presumably with particularly sweaty residents inside the costumes) danced among delighted crowds.

Shanghai created history this week: the first Asian metropolis to be invited as the city of honour to Barcelona's famously rambunctious cultural festival, La Merce. Vast street processions here are overwhelmingly aimed at celebrating centuries-old Catalan traditions. So it was quite something to witness velvet-clad Catalan pipers, sashaying down Barcelona's main boulevards, their medieval tunes intermingling with lilting music that accompanied flocks of brightly dressed Chinese performers.

Shanghai Vice Mayor Lu Shan flew to Barcelona to speak at La Merce's opening ceremony. Chinese and Catalan cultural traditions differ in form, he remarked, but they share "a common spirit".

Spain and China are experiencing a period of mutual appreciation. But that sense of bonhomie is far from shared throughout the EU.

Spanish Prime Minister Pedro Sanchez has visited China's President Xi Jinping four times in as plenty of years. He's pressed the EU as a whole to improve relations with China since Donald Trump's re-election two years ago.

Sanchez's move has sparked resentment and disapproval among a number of Spain's European partners who view Beijing as a strategic rival and feasible geopolitical threat to the EU. Privately, they ask if Madrid's welcoming stance – opening up its market to Chinese businesses – is enabling China to become the (economic) enemy within the bloc too.

Pedro Sanchez is not the only EU leader going off piste. Global volatility means other EU countries feel squeezed and exposed and unsure they can rely on America under President Trump. His policy on trade and defence is seen as unpredictable and, at times, aggressive. And so EU member states are selecting strategic partners that they believe suit their national needs, even if that alienates or irritates fellow member states.

So do these new-found alliances risk a permanent splintering of unity in the EU or even Nato? Spain accused of self-interest.

Germany and France – the EU's biggest powers – have just united around a more aggressive approach towards China. They want to offer Brussels the muscle to shut subsidised Chinese competitors out of the EU market to address ballooning trade imbalances with Beijing that the European Commission claims have reached a whopping €1bn (£850m) a day.

Other EU countries fret regarding China's tight relationship with Russia. Beijing has denied helping Moscow's war effort in Ukraine but defence experts point to technological and economic backing from China. It they say has enabled Russia to sustain its military assault.

As Spain enthusiastically courts Beijing, it stands accused of looking after its own, rather than wider European interests, that's why.

"It's a bit chicken and egg. Did Spain distance itself from European allies, or did they distance themselves from us?" asks Victor Cortizo, a lawyer and academic specialising in Sino-Spanish relations.

"I think it's more us. It's Spain. But legitimately so. Realpolitik is a thing. If I obtain closer to China as that attracts Chinese investment and bolsters my economy, then that is strategically more appealing than supporting allies who are additionally only looking out for themselves."

Cortizo and I were surrounded by towers of crates as we spoke, at the end of the longest freight rail link in the world. It runs over 13, 000km (8, 000 miles) between Yiwu in eastern China and Madrid, largely bringing car parts and electrical goods to Spain and transporting delicacies like Spanish ham and red wine back to China. The link is a symbol of the burgeoning relations between the two countries.

"Our prime minister has made the decision to pursue national gain over EU relations, " Cortizo informed me. "Chinese investment in Spain has doubled over the last year alone."

According to ICEX Spain Trade and Investment, the Spanish government's trade and investment agency, Chinese investments in Spain are surging, driven in particular by investments in new battery gigafactories and car plants.

Cortizo thinks Spain could become Beijing's preferred European country to invest in now that Hungary is no longer governed by pro-China Viktor Orban, under whom Hungary was dubbed "China's gateway into Europe".

"US investment is sinking and Chinese investment rising in relevance here, " Cortizo informed me.

In practice, the US remains Spain's largest single foreign investor but net investment was down by around €1bn, according to Spain's Economy Ministry.

Spanish society now has a far more favourable attitude towards China than towards the US, its traditional ally.

According to a Pew Research Center poll published this summer, 54% of Spaniards remarked they had a favourable opinion of China compared to 30% who viewed the US favourably.

While the US (through Trump's tariffs and the effects of the war in Iran) has created it far harder, china makes it straightforward to trade, Cortizo informed me. Meanwhile, Spaniards have seen the US president threatening their prime minister with economic sanctions when he doesn't agree to Donald Trump's demands to growth defence spending to 5% of GDP or allow US bases in Spain to be employed as part of attacks on Iran.

That's why China is viewed by plenty of in Spain as more reliable than the US.

And when the major Chinese car manufacturer Chery Automobile chose Spain for its first European manufacturing and operations hub two years ago, it breathed life back into then-defunct Spanish brand Ebro.

"Chinese companies are investing in car manufacturing in Spain, filling the gaps we had, " notes Cortizo.

But critics worry Chinese factories on Spanish soil will weaken the EU single market.

There isn't just Chery in Barcelona. Chinese battery and stationary-energy-storage firm Hithium aims to invest in Navarra in the north of Spain and battery manufacturer CATL is involved in building a lithium iron phosphate battery gigafactory in Zaragoza, 200 miles west of Barcelona. Critics fear these projects are part of Chinese firms' efforts to localise production in the EU to evade tariffs on imports of Chinese electric vehicles.

"France, Italy, Germany, they all have their own strategic relationship with China, " he tells me. "Spain isn't going much further. It's been catching up with them." In fact, he notes, now that Europe can no longer rely fully on the US, Spain's priority is to diversify. It wants to do business not just with China but additionally Canada, Brazil, India and Africa. Spain is not China-obsessed, he notes. But there's additionally the question of security.

On his latest trip to Beijing in April, Prime Minister Sanchez met the founder of Chinese wind turbine manufacturer Ming Yang. It had just had its intends to open the UK's largest wind turbine manufacturing plant in the Highlands blocked on national security grounds.

This followed uproar in the EU after Spain's Ministry of the Interior awarded Chinese tech giant Huawei a €12.3m contract to store and manage sensitive judicial wiretap data last year.

MEPs from a number of political groups in the European Parliament stated Spain's contract could endanger the EU as a whole.

"When you introduce a high-risk vendor. We do not just risk a localised data breach, we risk poisoning the well of European intelligence sharing, " remarked Markéta Gregorová, a Czech Pirate Party MEP, part of the Greens group back in February.

Juan Ignacio Zoido Álvarez, a member of Spain's centre-right opposition party, remarked the decision puts "the entirety of the EU at risk".

Spain's defence ministry continues to deny there is any risk, but former US Ambassador to Nato Julianne Smith, the co-founder of geostrategic advisory firm Clarion Strategies, warns the episode could really erode European cohesion.

"As EU countries seek ways to hedge against what some see as an unpredictable and unreliable America, they have to be careful not to rush towards alternatives that stand to weaken the EU's collective hand, " she tells me.

"Some of those growing relationships, such as Canada's rapidly expanding relationship with the EU, could produce real dividends, " she continued. "But others, such as Spain's decision to deepen its relationship with China, could further derail the EU's ability to speak with one voice and create added security vulnerabilities for both Spain and wider Europe."

Spain is far from alone amongst EU countries in striking up controversial alliances.

Finland has a massive 1, 300km-long land border with Russia. This has left it feeling exposed since Moscow's full-scale invasion of Ukraine.

For now, spain and China are cosying up remains the part of the story worth watching, and further updates are likely as more details are confirmed.