Guy de Jonquieres

To ask whether an EU-China global partnership can be renewed implies that such a thing once existed. It never has – and the chances of one being created have rarely looked more remote than today.

This autumn’s cancelled Leipzig summit had been billed as an opportunity to strengthen bilateral ties. However, because of Coronavirus the meeting was downgraded to a videoconference that yielded no big breakthroughs. Some progress was made on climate change, where the two sides pledged to renew co-operation. The test, though, will be whether Beijing lives up to its commitments in an area where its actions have often fallen short of its rhetoric.

In most other fields, EU-China relations have been deteriorating steadily for some time. That trend has been accelerated by Beijing’s increasingly aggressive behaviour abroad and hard line policies at home. Its crackdown on Hong Kong, brutal repression in Xinjiang, crushing of human rights and domestic dissent, raucous “wolf warrior” diplomacy and military muscle-flexing have all been greeted with dismay and disapproval in Europe.

In the economics sphere, President Xi Jinping’s increasingly strident nationalism has found expression in unabashed “China First” policies. His newly-minted “dual circulation strategy”, prompted by China’s trade war with the US, aims to reduce dependence on the rest of the world by building industrial and technological self-sufficiency. It joins other state programmes, such as Made in China 2025, intended to secure global Chinese dominance in industries of the future.

These developments have rattled European nerves and created growing suspicion of Beijing’s tactics and intentions. Where the EU once saw steadily closer engagement and economic integration with China as mostly a one-way street, many member governments now view the country as a rival and, in some cases, as a threat. One consequence has been establishment of an inward investment screening policy, aimed at controlling Chinese corporate acquisitions.

Key to this shift has been the changed mood in Germany. For many years, China could count on German exporters’ enthusiasm for its domestic market to keep Berlin on side and fight its corner in Europe. No longer. Today, German industry’s complaints about growing market obstacles in China have combined with anxiety about Chinese technological dominance to breed scepticism of Beijing and wariness of dependence on China in both business and government.

That said, Sinophobia in Europe is nowhere near the levels in the US. Beijing’s relations with Brussels are far less confrontational than with Washington. Channels of dialogue remain open and long-winded negotiations on an investment treaty – one of the EU’s few sources of leverage over Beijing – trundle on. The two sides have also sought together to limit or repair the damage to the World Trade Organisation’s dispute settlement system inflicted by US wrecking tactics. However, such joint endeavours are ad hoc and depend on an increasingly rare convergence of interests.

For Europe, the big challenge for the foreseeable future will not be to chase after an almost certainly illusory “partnership” with Beijing. It will be to maintain a firm stance towards China without being caught in the crossfire of Beijing’s increasingly bitter conflict with the US.

Dr Yu Jie

To date, Europe has shown little interest in involving itself in the global power struggle between Beijing and Washington. The majority of European governments have taken a nuanced view on the China challenge; many have shared the US’ concerns over the direction of the Middle Kingdom under President Xi Jinping, particularly in relation to domestic market access and unfair competition from state-owned and state-backed companies.

Yet internal divisions over China have long since troubled Europeans. Many have long feared the impact of the rise of China on international democratic governance norms and the rule of law.

In recent months, the EU has found itself at odds with Beijing on a wide range of issues, some pre-existing, others emerging from the Covid-19 pandemic. European countries remain under increasing pressure from the US to abandon Huawei’s role in their 5G networks, for example. Other issues include ongoing controversies over China’s Europe-bound direct investments and Beijing’s relentless promotion of the Belt and Road Initiative (BRI). Regarding the latter, areas of mutual disagreement have included the criteria of BRI loan offers, labour conditions within Chinese companies as well as Beijing’s intentions in South and Eastern Europe.

Despite this, China has remained clear on what it desires from the Chinese-EU relationship. Most of China’s “wants” from the EU are more about economics than security. This is demonstrated as much by President Xi Jinping’s two recent trips to Europe and Beijing’s determination to complete negotiations of the EU-China Bilateral Investment Agreement within 2020.

First, the European single market remains extremely attractive to Chinese companies and the government. In the eyes of many investors, the EU represents a secure home for their investments. In particular, a preferred partner for China’s ever-growing appetite for overseas asset acquisitions. This fact remains, despite increasingly stringent caution on behalf of European government and business.

Second, Beijing has found itself fighting economic slowdown and a protracted contest with its most important economic and strategic partner, the United States. The two difficulties are intrinsically intertwined and, as a result, China is looking to build alliances with Western powers committed to the principles of free trade and globalisation, such as the European Union.

Third, Beijing is eager to be recognised by established economies and has high-hopes for Europeans’ endorsement of its global ambitions, such as the BRI, as recently demonstrated by Italy – a decision raising eyebrows in European capitals, as well as in Washington.

Despite the Covid pandemic, all three “wants” from Beijing have changed very little in principle. Yet, China’s “Dual Circulations” alternative economic recovery plan will likely see its orientation towards the EU shift accordingly.

Much like China’s relations with all great powers, there is a substantial distance to travel between wishful thinking and reality. Politics is about the art of feasibility. Capitalising on Europe’s strengths as a global champion of rulemaking, while preserving unity, is the best way to work with China on common global challenges. However, to pursue a “principled engagement” policy with Beijing, the EU will have to balance its ideological divisions with realism about how much it can change the Chinese government’s outlook and political choices. For China and the EU, it is a vital decision time.

Charles Dunst

The European Union is anything but sure of how to deal with China. For years, Brussels has sought to economically benefit from an illiberal China’s rise while simultaneously advancing liberal European values. This naïve approach unsurprisingly led to repeated clashes over human rights, climate change, and trade. Given the way EU-China relations are trending, this September’s dour EU-China summit—reduced by the pandemic to a tense video call reception—was apt, fitting the current mood that promises also to colour future relations.

Despite previous reluctance to criticize China, Europe seems to have lost patience with the Asian Giant. This was perhaps best indicated by the “diplomatic disaster” that was Chinese Foreign Minister Wang Yi’s recent visit to Germany. The Germans chastised Wang for threatening a Czech politician who visited Taiwan, urged him to scrap the security law for Hong Kong, and reproached him for China’s seemingly-genocidal treatment of the Uighur Muslims in Xinjiang. For all his trouble, he didn’t even get to meet Chancellor Angela Merkel.

This German trip, along with the tense virtual summit and European admonishment that followed, suggests that European leaders are increasingly waking up to the reality of China’s illiberal aims: to create a Sino-centric world order defined not by rules or values but simply “by the degree of deference” that countries are willing to offer Beijing. Senior European politicians are, per one EU source, “think[ing] carefully about what kind of geopolitical actor China is trying to become.”

The strain stemming from European acceptance of China’s illiberal designs has led to disagreement, in particular, over trade—Brussels demands Chinese “transparency, predictability and legal certainty of the investment environment, while China continues to embrace a mercantilist economic approach—and human rights. Whereas the EU criticizes China’s crackdowns, Beijing, with an air of incredulity, repudiates the EU for purportedly violating “the basic … norm of non-interference in other countries’ internal affairs.” Other disagreements abound on issues including climate change and digital security.

And while Beijing is still trying to curry European favour, it is hard to see how the two can ever have a meaningful partnership when they cannot even agree on the basic building blocks of diplomacy. Chinese leaders come to table with the arrogant assumption that China is a superior civilization to which all others should defer; Europe premises its approach on Enlightenment assumptions of equality. Beijing’s illiberal visions are nothing less than alien to Brussels.

Yet China is likely to become more assertive. The question, therefore, is not if the EU and China can reach some mythical middle ground of cooperation, but if Europe will prostrate itself to an emboldened Beijing.

Although rising anti-Chinese sentiment across Europe should preempt further EU deference to Beijing, remaining naïvety—“from a European point of view, our partnership with China is indispensable and must be maintained and expanded,” German foreign ministry’s top Asia official recently declared—could lead the EU deeper into China’s embrace.

But with the era of China’s harmoniousness over, replaced by that of a belligerent Beijing, the departure of “European naivety” seems likely to follow, bringing about only further discord between Brussels and Beijing.

This blog is part of Ask the Experts, a monthly series where we pose a pertinent question to our network.

This article gives the views of the authors, and not the position of the China Foresight Forum, LSE IDEAS, nor The London School of Economics and Political Science.