EU-China Opinion Pool: The EU-China Summit 2022

The latest EU-China summit threw into sharp relief the current challenges in EU-China relations. The disagreements over Russia’s war on Ukraine – with all its implications for the international rules-based order – and over the key obstacles in direct relations, all point to deeply rooted divergences that may not be reconcilable in the foreseeable future. As the space and political will for cooperation between the EU and China continued to shrink, it is legitimate to ask just how sustainable the EU’s current approach to China is, and whether it can continue to treat China simultaneously as a partner, competitor and rival.

In this round of MERICS’ EU-China opinion pool, we have asked a number of experts: 

In the wake of the EU-China Summit, is it time for the EU to update its multifaceted China policy?

The MERICS EU-China Opinion Pool is compiled by MERICS Analyst Grzegorz Stec.

There is no better China policy than a multifaceted one. 

For all the pretense of a bilateral dialogue on issues ranging from human rights to people-to-people exchanges, the EU was for decades seen by Beijing primarily as a trade partner. In 2019, the EU strengthened its position with the launch of its new policy describing China as a partner, a competitor and a systemic rival.

Meanwhile, the EU has built a comprehensive toolbox of defense mechanisms in the economic sphere, ranging from investment screening regulation to anti-coercion instruments, and shown in recent years a new assertiveness vis-à-vis China. 

The summit was clear evidence of this newly acquired stance, albeit the result of long debates among – and within – member states, including France. With Ukraine’s situation overshadowing international relations, the EU is able to defend its foreign policy while not shutting the door to issues such as trade and climate change. The key difference is a new confidence in setting the agenda, requiring China to focus on an uncomfortable issue which the CCP would probably rather avoid when talking to Western leaders. 

This does not mean that the EU has given up on a multi-pronged approach. It is an expression of a changing environment, where both the liberal international order and globalization are at stake. With its rich consumer market, the EU has no choice but to put forward its values. Only with unified and principled diplomacy can the EU convince China that it has finally acquired a strong political dimension that goes beyond vague statements and communiqués.
 

China’s unprecedented economic coercion against Lithuania and multinationals, and Beijing’s political endorsement of Russia’s assault on Ukraine together provide justification for scrapping the EU’s multifaceted, tripartite approach towards China. 

What we’re observing now is an ongoing process by China and Russia to attempt to demolish the economic, security and normative order in Europe and beyond. This leads to the conclusion that China is neither a partner nor an economic competitor. War in Ukraine is a global issue challenging international norms, while the punitive actions against Lithuania are illicit and have nothing to do with competition. China’s authoritarianism and its alignment with totalitarian Russia, a country which has launched a full-scale war and is committing atrocities, clearly epitomizes the PRC as a systemic rival. 

In short, European security and the EU’s credibility is at stake. 

My intention is not to criticize EU’s multifaceted policy. When the concept was adopted, there were reasonable arguments for it. Unfortunately, China went further than we expected. Now, to continue to call China a partner and competitor would imply “business as usual”, but we all know this is not the case. The EU did a very good job at the latest summit with China clearly communicating its stance. It should go a step further. 

It is high time we gave up the illusion that China is in any major respect different from Russia. China’s playbook is different, but its goals are convergent with Russia’s. The EU should treat China as a rival and, if Beijing supports Moscow materially, as a threat. The bloc should continue its work on effective defensive measures and prepare a detailed list of sanctions to be promptly imposed on China if it provides Russia with support. And it should cooperate with the United States in tracking Beijing’s potential behind-the-scenes assistance to Moscow while commencing the real work needed to reduce the EU’s dependence on China. 

The 2022 EU-China Summit was presented as a “non-business as usual” one. However, the outcome – acknowledging that the dialogue with China is now open and that there is a frank exchange of diverging views – is certainly not ambitious. The recent move to consider China as simultaneously a strategic partner, economic competitor and systemic rival led to a multifaceted China policy, which is simply a compartmentalized approach to China, including cooperation (chiefly on global climate change), competition (in international trade and investment) and conflict (over global governance). The coexistence of different approaches to China leaves the floor open to contradictions among different individual member states. Most notably, two areas stand out where the intrinsic ambiguity of an EU multifaceted approach leads to inconsistencies.

One such area is scientific and technological cooperation, which often includes technology transfer and therefore serves as a vehicle for competitive games. This is especially important for countries, like Italy, that share long-standing cooperation activities, partly through unregulated academic cooperation. It points to a need for compulsory common guidelines specifically for academic cooperation for all member states.

A second area is the divergence in national approaches to strategic M&As from Chinese entities. Countries with established business linkages with China, including Italy, may serve as “entry points” in cases where national governments do not follow more precise guidelines. This is what happened in Italy, whose approach to such M&As radically changed from the previous (more open) to the current (more rigorous) government.

The EU does not need to update its multifaceted China policy. The current approach, based on treating China simultaneously as a cooperation partner, economic competitor and systemic rival, has its value. It enables the EU to cooperate with China in areas of its own interest. However, the last summit, revolving around the war in Ukraine and Beijing’s support of Putin’s regime, revealed  that the space for potential cooperation has significantly shrunk. 

The EU cannot claim to be ignorant of what China’s party-state stands for. Over the years, it has witnessed crackdowns on political, economic and intellectual oppositions, massive human rights violations directed against minorities, and continuous support of authoritarian regimes abroad. China’s domestic and international policies have resulted in slow yet visible change in the EU’s normative views on China, accelerated now by the Sino-Russian alliance. These views may not be shared across the board of all member states, nor is there a consensus on how to react, especially when economic dependencies are at play. Yet the overall climate in Brussels and a number of European capitals is undergoing a change. 

EU members in Central and Eastern Europe (with the notable exception of Hungary) have long been disillusioned with the lack of tangible results in cooperation with China. They have also been concerned by Beijing’s hostile rhetoric toward countries that decided to pursue closer cooperation with Taiwan. While the administrations of CEE member states are preoccupied with the impacts of Russia’s invasion of Ukraine and the floods of refugees, China’s support of Russia has not gone unnoticed in the region. The China and Russia-skeptic Czech government, which will preside over the EU in the second half of this year, is inclined to consider China as on a par with Russia – in other words, it sees China as another hostile, unpredictable, authoritarian regime. This view will undoubtedly influence the EU agenda. 

The EU’s multifaceted China policy doesn’t need an upgrade – it just needs more buy-in from member states, particularly Germany! 

Angela Merkel famously limited her personal China policy to two facets: partner and competitor. Calling China a rival was considered diplomatically reckless by her advisors. Merkel’s successor, Olaf Scholz, has upgraded the rhetoric. “Systemic rivalry” figures prominently in the new German government’s program, which promises to develop a China strategy rooted in European cooperation. 

When can European partners expect results? For connoisseurs of policy documents, good things are in the making. Germany is currently drafting a new national security strategy; a separate China strategy will follow in late 2022. Scholz’s cabinet seems keen to get ahead of the curve, at least rhetorically. Russia’s war in Ukraine and China’s tacit support for it have demonstrated what is at stake. German policy makers are now painfully (re-)learning the vocabulary of security, in particular economic security. 

However, don’t expect Germany to connect too many dots between its approaches towards Russia and China. Political appetite for risking frictions on a second front is low. Businesses are lobbying to stabilize relations with China to offset losses in Russia and elsewhere. In the German parliament, a conservative politician who heads a pro-Beijing interest group could soon chair the German-Chinese parliamentary group. And Scholz himself recently sat through a one-hour TV interview about global affairs without mentioning China once. From a German perspective, none of the facets of relations with China currently look very pretty.