In recent weeks, a palpable shift has emerged in Europe's approach to formulating the forthcoming China policy, which demands caution and precision to fine-tune an enduring strategic orientation. The EU is determined to “recalibrate” its stance, liberating from the shackles of excessive reliance, especially in vital and emerging technologies. This commitment arises from the desire to safeguard economic security and mitigate potential hazards. Rather than engaging in vain debates, the objective should be to 'de-risk' the future, setting a course that balances the protection of European interests with cooperation.
The primary objective should foster a genuine sense of unity within the EU, enabling effective collective determination. Notably, in May 2023, the EU's high representative emphatically declared the concord of all 27 countries, presuming a cohesive front. However, uncertainty prevails from the Baltic Sea to the Carpathian Basin, as Europeans grapple with the enigmatic contours of every member state's approach to China, amplifying the urgency for decisive cohesive action.
1. EU's Ambitions for a Dynamic Relationship with China
During the last Gymnich meeting, EU High Representative Borrell presented a paper titled “Reshaping Our Relationship with China, Engaging with China, Competing with China,” where the EU showcased its current efforts, actively identifying vulnerabilities and formulating strategic measures to unravel them. Key initiatives such as the Foreign Direct Investment screening, the Anti-Coercion Instrument, the European Chips Act, the Critical Raw Materials Act, and the Sovereignty Fund are indicative of the EU's commitment to safeguarding interests and bolstering resilience.
In the realm of short-term goals, the war in Ukraine holds the key to a transformative and mutually beneficial path for both parties. Firstly, Europe seeks China's wholehearted commitment to a political resolution, which could also be a transformative catalyst in forging a more robust alliance. The 14-month delay before first Xi's call to Zelensky, followed by a few more weeks for the first visit of a Chinese official tasked with initiating peace talks, highlights the urgency of more proactive involvement. Secondly, by immersing itself more profoundly, China can significantly bolster its international standing as a thorough global power, effectively mending its somewhat tarnished image within Europe. Finally, a successful resolution in Ukraine would unlock substantial business opportunities, particularly in the context of China's Belt and Road Initiative. This would open avenues for trade, investment, and infrastructure development there, while also serving as a vital corridor to cover the wider region. Thus, addressing the war yields not only short-term benefits for Europe but also long-lasting advantages for China.
In the medium-term, the focus lies on de-risking. While the member states share an understanding of this matter, a comprehensive long-term vision remains elusive. The threefold perspective of China as rival, partner, and competitor has gained prominence, especially in terms of economic security, where it is increasingly seen as a “systemic rival.” Mitigating excessive dependencies has become crucial. The objective is not complete decoupling like the U.S., but rather recalibrating economic relations to ensure a fair balance and avoid over-reliance on strategic sectors such as digital transformation, solar panels, critical raw materials, and specific technologies.
In the long-term perspective, several crucial aspects emerge. First, addressing the significant trade imbalance, as China currently exports nearly three times more to the EU (€1.7 billion compared to €660 million per day). Second, European investments face challenges due to China's barriers, despite efforts to address them through the Comprehensive Agreement on Investment, which is in a state of uncertainty, even though the Chinese Ambassador to the EU has promoted it lately. Third is reinforcing strategic autonomy; the EU must navigate the complexities of the U.S.-China rivalry and avoid aligning with either side, particularly in the context of Taiwan. Balancing the maintenance of the status quo and de-escalating tensions in the Strait while adhering to the One China policy presents an increasingly challenging dilemma. As Europe shifts focus towards a more realist approach (according to Borrell, the reason is that the Strait of Taiwan “is so important for world trade, and, in particular, for us,”) the traditional emphasis on supporting democracies solely based on their political system seems to be gradually evolving. Even though, the formulation of a lasting strategy remains an enigmatic defy awaiting resolution.
2. China's Aspirations in the Relationship with Europe
Both entities have embarked on a consequential process of re-engagement, characterized by a notable charm offensive from China towards Europe. This concerted effort bears immense significance for both parties, exemplified by the reception of EU leaders by President Xi and the visits in May 2023 of high-ranking CCP officials to Europe, all unified in delivering a resolute message.
China has explicitly articulated its EU objectives, aiming to prevent the emergence of a 'new cold war,' thwart decoupling efforts, and avoid punitive sanctions on Chinese companies, which they perceive as a treacherous act akin to a “stab in the back.” This refers to the EU's 11th package of sanctions (still in the works), in which Europe targets specific companies that have been identified as aiding Russia in evading trade embargoes, which appears highly fitting to proceed with. However, China warns that such actions could trigger repercussions. Within this context, Foreign Minister Qin also emphasized the mutual need to uphold economic globalization, coordinate policies, seek collaborative opportunities, address concerns, and safeguard global stability.
China shares Europe's aspiration to bolster “strategic autonomy,” with the underlying aim being to diminish the EU's reliance on the U.S. In line with this objective, Qin has vehemently rejected the decoupling policy pursued by the U.S. Interestingly, a noteworthy development has occurred as the U.S. has begun aligning with the EU's de-risking concept. The recent G7 summit held in Hiroshima highlighted the objective of diminishing excessive dependence on China (“We are not decoupling or turning inwards. At the same time, we recognize that economic resilience requires de-risking and diversifying,”) indicating a reduction in nuanced geopolitical differences among the involved parties. Paradoxically, despite facing significant Chinese criticism, this outcome brings China closer to its objective of maintaining active trade involvement and influence, rather than being sidelined.
3. Beyond the Battle of Core Values in Motion
China and the EU have demonstrated a mutual recognition of potential areas of convergence. Yet, they often use every platform to highlight differences, leading to unproductive debates. In this context, while Borrell emphasized “values” as the EU's main concern regarding China, the actual implications for Europe lie in the other aspects raised, such as reducing overreliance, safeguarding economic security, and managing risks.
However, rather than engaging in constructive dialogue, meetings and press conferences have transformed into predictable arenas where both parties assert their viewpoints on various issues, including different political systems, concerns over nationalism and ideologies, questions of sovereignty and security, and challenges related to human rights. As both parties know that their positions are going to remain unchanged, these interactions show that only prioritizing political posturing over meaningful dialogue will turn them into a spectacle to appeal to respective domestic audiences, rather than serving as productive discussions to catalyze better relations.
The clash between complex issues' reality and partisan gains hampers constructive solutions, and public disputes will not convince either side. Consequently, the question arises: Human rights, or trade first? Despite a commitment to promote universally European values, trade has often taken precedence over human rights concerns, with the West turning a blind eye to any possible abuse. Qin and Baerbock's last aggressive press conference exemplifies this. Germany's contradictory stance is evident as they endorse Cosco's acquisition of shares in the Hamburg terminal while simultaneously expressing deep concerns about human rights in China. Even more, if we consider Germany's significant trade dependency on China and a history of relying heavily on Russian commodities. Alternatively, Beijing underscores that external forces exploit these issues to sow instability within China. In this battle of narratives, everyone appears to be in pursuit of credibility.
Taiwan and the longstanding Western-adopted One China policy highlight this same discrepancy between political rhetoric and tangible certainty. Even today, although many countries express reasonable concerns about increasing tensions, no EU member state recognizes Taiwan as an independent nation. Macron's controversial statements were drawing attention to these double standards.
Is there potential for a convergence where both sides abandon futile displays and focus on effectively communicating the benefits and drawbacks of their association to their citizens? Only time will reveal the answer. By shifting Sino-European relations from spectacle to substance, we have the opportunity to heal divisions, and prioritize shared interests that have been expressed, ultimately benefiting everyone involved.
