Under Xi Jinping, China is greatly engaged in its neighbourhood. Beijing pursues two policies simultaneously in Asia. On the one hand, it offers economic assistance and assurances of its peaceful intentions, while on the other, coercing neighbours, including increasing its economic and military presence in disputed areas, which as a result raises distrust of it in the region. China’s activities may be a signal of its readiness to assume leadership in Asia. The EU should exert pressure on the PRC to transform the EU–China strategic dialogue into an effective cooperation mechanism that also includes security issues.