Since the beginning of trade tensions with the US, Beijing intensified its outreach to Europe in search for allies. In a ‘charm offensive’, China showed goodwill by suggesting it would make economic and political concessions. Particularly, it addressed issues of reciprocity, i.e. EU requests to have equal access to the Chinese market as Chinese investors and State-Owned Enterprises (SOEs) do in Europe, and Europe’s concerns over Chinese initiatives undermining EU unity and rules.
Europe, too, increasingly looks to China as a partner. Donald Trump’s alienating rhetoric and behaviour towards the EU have made the need for alternatives more compelling. However, the EU and China are far away from embarking on a comprehensive partnership. Rather, their cooperation remains limited to selected issues related to global governance. And despite an erratic US foreign policy, the EU still has much more in common with its transatlantic partner, while fundamental disagreements in EU-China relations persist.
Europe would therefore be well advised to keep using the momentum created by China’s need for partners amid the trade war with the US to put some of those disagreements on the table and seek further concessions in line with its priorities.
Amid the trade war with the US, Beijing embarks on a ‘charm offensive’ in Europe
July 2018 marked one of the most eventful periods in the institutional framework of Europe-China relations. Within less than two weeks, Chinese leaders met European counterparts at three annual high-level gatherings: the 16+1 Summit, the Sino-German government consultations, and the EU-China Summit. At all the three meetings, Beijing suggested that it was prepared to tackle some key concerns held by Brussels and Berlin, Beijing’s main trade partner in Europe. These included reciprocal market access and worries about China’s weakening of European unity and rules.
China’s renewed interest in promoting itself as a responsible partner lies in the ongoing trade dispute with the US. The need for partners has also given Beijing new impetus to use the window of opportunity offered by difficulties in the transatlantic relationship and foster closer ties with European countries. Ultimately, Beijing hopes that they would align with Chinese interests against the US.
To this end, China started paying more attention – at least on paper – to Europe’s complaints. For example, officials in Brussels and Western European capitals have been worrying about Belt and Road (BRI) projects that do not meet transparency requirements, market-based practices and environmental standards, or sub-EU frameworks to promote such projects (e.g. the 16+1 format involving 11 Central and Eastern EU members and 5 Western Balkan EU accessions states). The September 2018 European Parliament resolution on the state of EU-China relations reminded member states participating in 16+1 that the EU should speak with one voice to China. And German Foreign Minister Heiko Maas also recently stressed the need to counter China’s influence in the Western Balkans.
Beijing now seems to have taken note of these concerns. Beyond positively setting European terms for cooperation on BRI based on openness, market rules and international norms, the guidelines for cooperation jointly signed by 16+1 members at the end of the Sofia Summit also welcome a more active involvement of observers (like the EU) and third countries in 16+1 cooperation projects.
Prior to this, Chinese State Councillor and Foreign Minister Wang Yi – in an attempt to reassure Brussels and Berlin of Chinese ‘benevolent’ intentions behind 16+1 – had told journalists at a joint press conference with Foreign Minister Maas that “China is now actively considering conducting trilateral cooperation with Germany in Central and Eastern European region”.
And straight after the 16+1 Summit, Chinese Premier Li Keqiang flew to Berlin, where he met Chancellor Merkel for the annual Sino-German government consultations. Here, Li promised to further open China’s financial market. Most importantly, on 10 July, Liu Xia – widow of late Nobel peace prize Liu Xiaobo – was allowed to permanently leave for Germany.
In another sign of goodwill, at the 20th EU-China Summit of 16/17 July, China agreed to exchange market access offers with the EU as part of the EU-China Bilateral Investment Treaty negotiations. China also agreed to release the joint statement on climate that it had halted in 2017 by putting the issue of Market Economy Status in the way of negotiations for the statement and de factoblocking its issuing to pursue Chinese economic interests instead.
Despite Beijing’s efforts and Trump’s unreliability, China remains a difficult partner to Europe
However, despite Chinese efforts, Europe still only sees China as a partner for a limited number of issues and a competitor or even adversary for many others. In her speech on the state of EU-China relations at the September plenary session of the European Parliament, HR/VP Federica Mogherini referred to China as a ‘complex partner’. On one hand, she stressed the importance of EU-China cooperation on issues like the preservation of the Iran nuclear deal, a peace process in Afghanistan as well as development and security in Africa. On the other hand, she emphasised the fundamental disagreements on values and principles that still constrain the EU-China relationship.
One simply needs to look at the recent EU-US-Japan statement on trade-distorting practices, or the EU’s WTO reform proposal – both indirectly targeted at China – to see that, despite difficulties, the EU still has much more in common with the US. Market restrictions as well as China’s aggressive technology takeovers will hinder EU-China plans to jointly work on WTO to counter US unilateralism. And while Mogherini reassured in an online op-ed that the EU’s newly announced connectivity plan for Eurasia is not meant to rival the BRI, the connectivity strategy sends a strong political message to Beijing by emphasising European principles of sustainability and respect for international norms.
As the EU Chamber of Commerce underscored in its latest business confidence survey, China’s selective market openings are normally accompanied by further domestic restrictions. By using the momentum created by China’s need for allies amid the trade war with the US, Europe can more confidently ask that China follows through on its promises and commitments to play by the rules.