As the President of the European Council, Charles Michel, headed to Beijing, the right way to deal with China remains a key global issue. Indeed, since Xi Jinping’s centralization of power in 2017 and the Trump administration’s reassessment of US-China relations, many countries are struggling to balance between containing a systemic rival – as China was labelled by the European Commission in 2019 – and courting a relevant economic partner.
In short, this is what continues to happen after the 20th Communist Party Congress concluded in October. Foreign leaders are rushed to Beijing and international meetings in Asia, such as the G20 and the Asia-Pacific Economic Cooperation (APEC) Summit, in order to reconnect with China after almost three years of Xi Jinping’s domestic self-confinement due to Covid-19. However, the post-pandemic world is drastically different. Decoupling isn’t a niche topic, but instead a legitimate political option already in use against Russia. In addition, industrial policies to secure domestic production and global value chains in critical sectors are already being implemented. If the desire to reduce economic dependence is shared across the Atlantic and with the richest Asian democracies, the way to enact it differs significantly.
One destination, but many paths
The US considers China its top competitor, even as Russia wages war on Ukraine, and is ready to adopt all the economic measures to prevent Beijing from succeeding in its bid for technological and economic dominance. This policy is manifested by the Biden administration’s decision to impose controls over chip exports to China. Yet, top European and Asian producers seem unable to bear the short-term costs of this strategy. In particular, the Netherlands and South Korea are voicing their concern over cutting economic ties with China. Currently, the US is focused on reducing militaristic saber rattling especially over Taiwan, in favor of economic competition with China. Biden attributes his stance to the rising authoritarian nature of Xi Jinping’s China. However, if the short-term tactical goal of the US is to prevent China from obtaining economic or military supremacy, then the long-term strategic vision is lacking. The US must consider to what extent they can afford to cut China off the global value chains of critical industries. If the issue is dealing with an autocratic China, is the final objective to democratize the country? Is the preferred alternative to isolate China so it cannot hurt the international community?
For the United States, simply keeping China at a safe technological and economic distance is good enough to structure its own national strategy around the notion of competition. However, this strategy isn’t congruent with the European Union’s interests, as displayed by the German Chancellor Olaf Scholz in a op-ed for Foreign Affairs. In fact, the EU isn’t a single state but a collection of tens of smaller countries each with their own economic interests. Unlike the US, the EU has no single-state national primacy to defend from China’s rise that apparently justifies the cost of decoupling. Therefore, the European countries do not perceive, the peril of China’s economic and technological rise in the same way as the US does.
Who speaks for the EU?
European countries don’t only consider competition with China less of a priority but certain states believe they can leverage their special ties with Beijing in order to obtain economic benefits. This was a major accusation made against Italy when it signed the Memorandum of Understanding for the Belt and Road Initiative in March 2019. The Italian government was intensely pressured not to engage excessively with China by Washington and, even more so, by Paris and Berlin.
However, after visiting Rome, Xi Jinping travelled to France, and French President Macron decided to welcome him along with German Chancellor Angela Merkel and President of the EU Commission Jean-Claude Juncker in order to showcase a united EU-China policy in contrast with the single-nation approach adopted by Italy, who was accused of rupturing European unity. Less than two years later Macron joined Merkel in signing the bilateral Comprehensive agreement on investment (CAI) as self-proclaimed EU representative. In addition, in the following months France, Germany and China conducted trilateral meetings on issues such as Ukraine and climate change. If France and Germany were on the same page to present themselves as the European spokespeople vis-à-vis China, this has since changed. In autumn of 2022 Scholz visited Beijing alone and he is said to have refused Macron’s request to accompany him causing a diplomatic contrast.
Michel’s visit to Beijing, therefore, comes at a very complex time. The autocratic character of Xi’s China is at its highest point, as can be seen by the ongoing protest, pressuring nations to keep the door to a “systemic rival” open or not. On the other hand, the US is unilaterally pushing for a tech decoupling strategy aimed at widening the tech gap with China, but this seems too costly for their European partners that don’t agree with the US on the importance of isolating China. Finally, European countries, starting with Germany and France, are involved in a kind of intra-European competition to gain the economic advantages that come with being China’s top interlocutor in Europe.
