Sanchez’s trip highlights Spain’s effort to chart an independent foreign policy within Europe, positioning China as a strategic partner rather than a geopolitical rival, in contrast with Washington’s stance.

Trump has previously criticized Madrid over its refusal to grant landing rights for U.S. forces during the Iran conflict and for what he described as insufficient defence spending among NATO allies.

The Spanish leader’s approach has drawn mixed reactions domestically, with supporters backing his economic engagement strategy while businesses and opposition figures warn that deteriorating relations with the United States could carry economic risks.

A government source said Sanchez’s meeting with Xi Jinping on Tuesday would focus on geopolitical issues, reflecting Madrid’s view of China as a stabilizing global actor. However, trade representatives cautioned that such positioning could exacerbate existing strains, particularly as U.S. tariffs on European Union imports continue to weigh on Spanish exports.

“The United States is the leading foreign investor in Spain,” said Ramon Gascon Alonso of Spain’s Exporters’ and Investors’ Club, pointing to the importance of bilateral trade in key sectors of the economy.

Opposition figures have also criticized Sanchez’s stance, warning that public disagreements with Washington could undermine NATO cohesion and jeopardize the U.S. military presence in Spain.

China’s ambassador to Spain, Yao Jing, said stable bilateral relations had contributed to increased Chinese investment, describing Spain as pragmatic in its approach to economic cooperation and market access.

Official data showed Chinese firms invested 643 million euros in Spain in 2025, up from 149 million a year earlier, bringing total investment between 2010 and 2025 to 9.7 billion euros, largely concentrated in extractive industries and the energy sector.

During the three-day visit, Sanchez is scheduled to attend a formal banquet hosted by Xi, meet Premier Li Qiang and senior legislator Zhao Leji, and engage with business and academic leaders, including a visit to Xiaomi and a speech at Tsinghua University.

Spain is seeking to narrow a trade deficit with China that has more than doubled over four years to nearly $50 billion in 2025, with efforts focused on boosting agricultural and manufacturing exports.

Officials are also aiming to finalize a regionalization agreement to protect poultry exports affected by bird flu, following a similar arrangement that supported the pork industry during a previous African swine fever outbreak.

An appellate authority at the Enforcement Directorate (ED) issued the so-called show cause notices under India’s foreign exchange laws for alleged illegal remittances of 55.51 billion rupees ($673.2 million). The funds have been frozen by the agency since last year.

Show cause notices are typically issued to a company to ask it why the federal agency should not proceed to take action against it for wrongdoing.

Xiaomi and the three banks did not respond to requests for comment.

India alleges Xiaomi’s local unit made illegal remittances to foreign entities by passing them off as royalty payments. The Chinese company has previously said those payments were all legitimate and that it will “continue to use all means to protect the reputation and interests”.

The notices were issued to Xiaomi and officials including the chief financial officer of its India unit, the ED said in a statement.

The banks received notices because they allegedly allowed foreign remittances described as royalty payments without conducting due diligence and obtaining necessary documentation, the agency added.

Reuters reported last year Indian investigators had alleged during their probe that Xiaomi misled its banker Deutsche for years by claiming it had an agreement for payment of royalties when it had none.

Court documents show Xiaomi’s frozen assets are spread across accounts at various banks including Deutsche, Citi and HSBC.

The Chinese company is one of India’s leading smartphone players, having grown rapidly in recent years by offering budget smartphones. It competes with Samsung Electronics (005930.KS) and other Chinese brands in the booming South Asian market.

Xiaomi last year told a court that the asset freeze was “severely disproportionate” and had effectively halted its operations in India. In April, an Indian court rejected Xiaomi’s request to lift the freeze

Xiaomi’s assets in India were frozen last year by the federal financial crime agency which alleged the company had made illegal remittances to foreign entities by passing them off as royalty payments.

“We are studying the matter and waiting for the written order,” a Xiaomi spokesperson said regarding the ruling by a court in Karnataka state, adding the company’s operations in India are compliant with local laws and regulations.

The company has previously said its royalty payments were all legitimate and that it will “continue to use all means to protect the reputation and interests”.

Xiaomi has lost its spot as India’s top choice for smartphones to rival Samsung Electronics (005930.KS) as Indian consumers opt for improved features in the world’s second biggest market for the devices.

Chinese companies have also struggled to do business in India since 2020 due to political tensions following a border clash.

India has cited security concerns in banning more than 300 Chinese apps since then, including popular ones such as TikTok, and has tightened rules for Chinese companies investing in India.