E.U. Struggles to Define China Strategy

E.U. Struggles to Define China Strategy

Amid a NATO meeting in Washington, ongoing Brexit negotiations in London, and an upcoming E.U.-China summit, European capitals are debating the best way to manage their relationship with China, which the E.U. now defines as a “systemic rival.” China and the E.U. have so far failed to agree on a joint declaration at their upcoming summit due to disagreements over trade, investment, and human rights issues. Robin Emmett and Philip Blenkinsop report for Reuters:

Donald Tusk, the head of the European Council, has recommended rejecting the statement as it stands, according to an EU source. China had not met EU hopes that it would open its markets, nor seriously committed to reforms of global trade rules.

According to an early draft put forward by the and seen by Reuters, Beijing would be bound into completing talks on an investment agreement and committing to remove what the EU says are unfair barriers to trade.

The EU also wants to show the United States that the trade war route is not the only way to coax Beijing to open up.

But Chinese officials have removed or changed many of those references, the EU diplomats said, raising the embarrassing probability of no communique at all after Chinese Premier Li Keqiang, European Commission President Jean-Claude Juncker and European Council President Donald Tusk have met. [Source]

As China’s economic clout and trade relationships take center stage, five rights groups have urged the E.U. to focus on China’s human rights record during the summit, while the European Council on Foreign Relations called on E.U. member states to forcefully speak out against the network of internment camps holding Uyghurs and other Muslim minorities in Xinjiang.

Others have expressed concern over Beijing’s efforts to influence European lawmakers through a variety of influence campaigns as a way to guide E.U. policy toward China. Peter Martin and Alan Crawford report for Bloomberg:

[…] Bloomberg spoke with more than two dozen diplomats, government officials, lawmakers and business leaders in China and in Europe to shine a light on Beijing’s links with sympathetic politicians and political parties across the European Union.

What emerges is an extensive network of contacts of all political persuasions, all of whom are either predisposed to China or are open to Chinese arguments. The result is a band of China advocates throughout Europe whose positions range from urging closer economic and governmental cooperation with Beijing to air-brushing over China’s human rights record.

[…] “From a friendly partner, in a few years it changed to an unfriendly competitor,” [Jo] Leinen said of China. He cited industrial policy as well as human rights violations including the detention of Muslim minority Uighurs for the “rougher tone” from the EU. “China has lost the battle in the U.S. and is on the way to losing the battle in Europe,” he said.

Against that backdrop, China is stepping up its political engagement with a different set of tools. Invitations to politicians to visit China are issued by government-run “friendship organizations” like the Chinese People’s Association for Friendship with Foreign Countries, as well as Communist Party bodies such as the International Liaison Department and the United Front Work Department. The invites form part of a “united front” strategy to win support for China’s agenda through alternatives to official diplomatic channels. Xi described united front work as a “magic weapon” in a 2014 speech. [Source]

Following a meeting last month with , European Commission President Jean-Claude Juncker raised concerns about China’s growing role in Europe as it promotes its Belt and Road Initiative. From Bloomberg:

“One country isn’t able to condemn Chinese human rights policy because Chinese investors are involved in one of their ports,” Mr Juncker said. “It can’t work like this.”

Europe has become more vocal in its criticism of China of late, calling the country a partner as well as an economic competitor and a “systemic rival” on governance. Concerns are mounting over China’s growing influence, predatory investments and possible hacking of 5G data networks.

The EU has also been divided over China’s Belt and Road infrastructure project, which some see as a threat to sovereignty. Italy’s populist government last month signed on to the initiative, brushing off the concerns.

Mr Juncker said he’s not against the project “as long as the conditions are right”. If European companies can profit from it and “if you don’t only meet Chinese workers on these construction sites but also European workers, then this is all feasible”, he said. [Source]

At Foreign Affairs, Andrew Small further discusses the reasons for the changing European attitude toward China and urges the U.S. to work together with European countries to jointly counter China’s influence:

As next week’s EU-China summit approaches, Europe has begun to fundamentally rethink its China policies. The shift is so substantial than even seasoned Asia hands have described it as a “revolution.” Despite differences among the EU member states, the overall thrust of the change is in convergence with the new U.S. approach. As recently as three years ago, member states resisted even modest changes to strengthen EU trade defense instruments, despite the flood of Chinese steel imports. The notion of an EU-level mechanism to scrutinize Chinese investments was still anathema to most European leaders. If the United States in early 2016 had suggested closer coordination in restricting Chinese access to Western technologies, a common public front on China’s non-market practices, or cooperation on infrastructure financing as a counterbalance to China’s Belt and Road Initiative (BRI), European allies would have responded with a bemused rebuff.

[…] What accounts for the shift in European thinking? No doubt political and security developments have played a role—from China’s deepening authoritarianism under President Xi Jinping to its efforts to extend political influence in Europe. The strongest drivers of the change, however, are economic. Europe has lost hope that China will reform its economy or allow greater access to its markets, and at the same time, China’s state-backed and state-subsidized actors have advanced in sectors that Europe considers critical to its economic future. The implementation of Made in China 2025 (a ten-year plan to speed the development of high-tech industries), a spate of sensitive Chinese takeovers in Europe, and the BRI’s export of China’s domestic economic practices to third countries suggest a threat that is coalescing with real immediacy. [Source]

As leaders gather in Washington this week, several European officials have expressed concerns about how the alliance should deal with China and whether they can work together with the U.S. to do so. From Matthew Karnitschnig at Politico:

Questions about whether and to what extent alliance members should allow Chinese network supplier Huawei to operate in their countries, along with Italy’s move to join Beijing’s ambitious Belt and Road Initiative, have put the question of how NATO should respond to the Asian power front and center.

“China is set to become the subject of the 21st century on both sides of the Atlantic,” German Foreign Minister Heiko Maas said in a speech in Washington on Wednesday. “China is a challenge on almost every topic. It is important to gain a better understanding of what that implies for NATO.”

It’s a fraught issue for much of Europe, which, like the U.S., has deep commercial ties with China.

[…] “We could all benefit if we could develop joint approaches with the U.S.,” said Wolfgang Ischinger, a former German ambassador who now heads the Munich Security Conference. “But we don’t have an EU strategy yet, and you can’t have a joint strategy if you don’t have your own strategy.” [Source]

At Foreign Policy, Bruno Maçães recounts how the shift in European thinking about China started a decade ago with Germany:

A year later, the mood had already changed. Politicians and officials were starting to hear alarm bells coming from German industry. Those actually dealing with Chinese companies could see the writing on the wall: China had used trade and economic links with Western partners to upgrade its own manufacturing processes. German companies were starting to feel the heat as their technological edge evaporated and they lost contracts to major Chinese competitors.German companies were starting to feel the heat as their technological edge evaporated and they lost contracts to major Chinese competitors. The China shock was real.

There was another issue, too. China might be adopting Western technology, but it was not becoming more Western. The state was still the prime economic agent. The Communist Party was never far from Chinese companies, helping them along with subsidies, cheap credit, and other assistance. Competition would never be fair as long as private German companies were up against the Chinese state. The solution? If China could not play by the rules of the liberal Western order, then perhaps it should not be allowed to play at all.

[…] Relations between Europe and China have reached a critical new juncture, but we’re still having the same old discussion about globalization and openness, in which globalization is seen as the opposite of economic nationalism. The real revolution, though, will take place when the two are combined and we enter a world in which nations are both deeply integrated and compete for power and influence. [Source]

Meanwhile, as the struggles to find a resolution to the crisis and determine its own future relationship with the E.U., Parliament’s Foreign Affairs Committee has issued a report urging a rethinking of its relationship with China, “to fully acknowledge the consolidation of power in the hands of the Chinese Communist Party under President Xi Jinping.”

For more on China’s growing influence in Europe, see a CDT interview with MERICS researchers Kristin Shi-Kupfer and Marieke Ohlberg, and a post from Project Sinopis’ Martin Hála.

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