This is the best position for China now. The EU is in shambles and the US is printing dollars like a drunk uncle.
So with China sanctioning EU so hard (the EU then started whining lol, they seemed so shocked) shows that China doesn't care for the CAI as it was from the start a gift to the EU.
Angela Merkel spent all her political capital to push this deal because she is the only smart one from all these EU moronic leaders. So if they ultimately decide to throw it away, the US would laugh all the way to the bank as they already have their Phase 1 deal