What should #China do in the China-EU ‘highlight moment’?

| July 18, 2019

The diplomacy between China and Europe is ushering in the ‘highlight moment’. Chinese President Xi Jinping will visit Italy, Monaco and France, while the Chinese Foreign Minister Wang Yi heads to Europe to handle diplomacy with the heads of states that has important strategic leading roles in the development of China-EU relations.

Facing worldwide resistance, intensified trade frictions, and increased divergence between the United States and Europe, the world is undergoing a major re-adjustment of its geo-politics and geo-economics. The expansion of China-EU economic and trade cooperation, and the strengthening of the diplomatic relations between the two have undoubted important strategic significance. Under a backdrop of anti-globalization, Anbound’s Chief Researcher Chen Gong has previously proposed the ‘1+3’ co-operation structure. A basic idea under this framework is the economic and trade co-operation between China and major European countries.

However, can the strategy and ideas for China to strengthen its cooperation with Europe be realized? This depends on the will, effort and collaboration of both parties. Cooperation between any national organization stems from their interests, especially considering the differences in institutional values between China and European countries. The cooperation between China and Europe may need to encompass more substances.

We have noticed that the EU countries have drawn up a joint communique recently. The communique proposed that China and the EU will “agree by summer 2019 on a set of priority market access barriers and requirements facing their operators”. The two trading blocs would set “deadlines for their swift removal by the next EU-China summit 2020 at the latest”. The joint communique also made it clear that the two sides plan to sign a special agreement by 2020 to increase bilateral investment flow that has been discussed for nearly 12 years.

The key point of the content above is that that the deadline for opening the market to China is set. From a diplomatic point of view, the joint communique clearly reflects the EU’s dissatisfaction with China, as it considers China has not fulfilled its commitment to the globalization of free trade and is unwilling to allow foreign companies to operate freely in China, yet they believe that at the same time Chinese companies are making full use of the EU’s open market. It is worth noting that the European Commission recently considers China to be a “economic” and “systemic competitor”, calling on the EU to adopt a sterner stance towards China.

This attitude is a big contrast to the past. Just two years ago, after Donald Trump assumed the presidency of the United States, China was seen by the EU as a potential partner in maintaining global rules and systems. Today, the attitude of the European Commission has sharply turned. In economic terms, China is seen as a competitor in key areas such as 5G network development. At the same time, China is also an all-rounded political opponent. It should be pointed out that the EU’s latest position on China and its definition of China’s role are no strangers to international geo-political changes of the past two years. In early 2018, the United States defined China as a “long-term strategic competitor” in the National Defense Strategy. Now the EU regards China as a “systemic competitor”, which also reflects the EU’s true attitude and position towards China.

Anbound’s research team believes that such requests may be based on the following background: Firstly, the EU still retains expectations for the United States, and believes that it is in an ally relationship with the United States. Therefore, it is supposed to share common interests with the United States. Secondly, the EU believes that its strength is similar to that of the United States, therefore its demands have the characteristics of “looting”. For EU’s requirements, it is estimated that there will be different opinions within the Chinese government. How then, should China treat such requirements from the EU?

Our view is that China should not accept the requirements of the EU easily, and not least because of the pressure from the United States. We suggest that China should adopt a “stratified” policy for the EU and treat EU institutions differently from those of European countries. The EU itself is a bureaucracy. China should negotiate with European countries. For the EU, it is appropriate to adopt the strategy of delaying. The reason is that there is a huge competition between the EU and the United States. As we have always believed, the main axis of competition in today’s world is competition in Europe and the United States, not between China and the United States. This coupled with the Brexit issue, would definitely mean that the EU would feel the impact, as it is not strong enough to withstand any pressure. In addition, the Trump administration that upholds “America First” would certainly be unwilling to let the EU enjoying all the benefits. This would be especially true for an American President like Trump who will not be that generous to his perceived competitors.

Final analysis conclusion

Along with the US, the EU has set a deadline for China to open its market. China must have reservations and should not be intimidated, nor should it accept the arrangements from Europe. Even in this “highlight moment” of China-EU co-operation, China should pay attention on its interest and integrity.

He Jun is a master in the Institute for the History of Natural Sciences, Chinese Academy of Sciences, majoring in intellectual history of science and is a senior researcher at Anbound Consulting, an independent think tank with headquarters in Beijing. Established in 1993, Anbound specializes in public policy research.

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