It has often been stated in the past that with the EU, China likes to divide and rule. But in the new, complex period we are all moving into, for once the case may be that the tables have turned, and now for relations with Europe, China is being divided and ruled.
There are two reasons for this. One is that the tightening economic conditions within the EU, and the ongoing tragi-comedy of the UK and Brexit, have created the start of what looks to be a `free for all’ between members states and their approach to the People’s Republic. On the same weekend in mid-March in which President Macron of France made cutting remarks about the need to no longer be naïve about China, Germany issued statements about their receptivity to telecom giant Huawei, and Italy formally signed up to the Belt and Road Initiative, China’s signature foreign policy idea. Even a dispassionate observer would look at this and find it challenging to identify an overarching narrative. The Commission in Brussels also produced one its hardest statements on relations with China in the same week, stating that Beijing was a competitor, not a partner, and that a tougher line had to now be taken.
Expected mediocre to non-existent growth in the Union area has focused minds and made leaders appreciate that self-interest is everything. Even during the much publicised Chinese Import fair at which President Xi Jinping spoke in late 2018, the response of the EU Chamber of Commerce in China was stark – there could be no more promises and so little delivery. Markets in China needed to open up. Real reciprocity needed to be achieved. The era of living through expectation towards China and the eventual rewards of engaging with it rather than enjoying these benefits in the present was over. There needed to be tangible gains, the same level of access to the domestic market that Chinese enjoyed in Europe, and proper collaboration. Finally the politicians have caught up, at least in some capitals, to this mantra.
Italy is perhaps a precursor to a much more divided approach, where the lack of ability to fund social welfare and other programmes with domestic money means that working much more with China to take support from there becomes a viable option. At the moment, the involvement by China in Italian investment and the economy is small. A lot needs to happen to show that the risk of being closer to Beijing at a time when there are so many issues elsewhere was worth taking. And everyone will be watching to see whether there will be a political price tag to deeper Chinese engagement. Will Italy start keeping much closer to the Xi era lines on issues like Xinjiang, Taiwan, Tibet and other sensitive matters? Will they veto human rights motions in the EU as Greece did two years ago? Will they go silent on matters around the South and East China Sea? Once upon a time these were all irritants for Beijing. Now they have become the core areas in which to see just how China seeks to influence the world around it through its investments and trade. These are the matters where that mysterious new phenomenon, Chinese power, becomes visible. And the prime theatre for this currently is Italy. That is an uncomfortably new exposed place to be in.
This brings us to the second point. When it was less a major player, China was content to see the EU disunited when and where it suited it. Divide and rule was its preferred approach. There was plenty of divisions to focus on between member states and their different positions and needs. But in the era where China is such a significant power, the desire for stability rather than instability has become paramount. Very ironically, as a rising, upstart nation China in the past was able to be more adventurous in its seeding of division amongst Europeans. Now it is the one with much more to lose. In the past China demanded responsibility from others. These days it needs to take responsibility itself.
This explains why the Trump presidency and its mercurial, capricious nature has been such a rude shock for Beijing. For over a year, China has been aware of its increased isolation, and has been delicately seeking stronger alliances away from Washington. The trade war has reminded it of its continuing dependence on America, and the need to carve out a world where it has more autonomy and agency. The EU with its massive market and huge intellectual and soft power assets is a major potential counterbalance. But with problems around Huawei, trade and on other issues, it’s a relationship which has continued to frustrate and perplex China.
A China on the cusp of achieving its dreams of great power status, faced with this new and unforeseen level of uncertainty across the Pacific, is now seeing that its attempts to find conducive partnership and some coherency in Europe have been thwarted by a similar level of surprise to that emanating from the US. Macron’s tart comments on the eve of a Xi visit on 24th March are only one amongst many other signs of a deeper scepticism and sharpness by some quarters of Europe towards China. In this new context, there once the EU’s divisions were a weakness, paradoxically they have become a strange source of strength. Beijing cannot relax and be complacent about what is happening in its second largest trading partner, particularly at the moment when there are problems elsewhere. Where one Europe was a stakeholder in China’s development, with the hope it would lead to conducive political reform, these days Beijing is increasingly a stakeholder in trying to find some European unity that gives it the predictability it craves in the era of Trump uncertainty. The question in all of this is whether, and how, Europe can use its new unpredictability to give it the things it wants from Beijing – better market access, more respect for intellectual property law, and great across the board reciprocity, or whether, like so much else over the last few years, this too ends up another wasted opportunity.