If push comes to shove, less China

Hong Kong, Huawei, USA – Europe's China policy faces some crucial decisions, says Mikko Huotari. Germany’s EU Council Presidency has to gauge how cooperative Beijing will be and take a clear stand. Partnership is no longer the default position in EU-China relations.

The stage was already set for the Leaders Summit in Leipzig in September. During Germany’s Presidency of the EU Council, Chinese President Xi Jinping had been scheduled to meet all 27 national leaders the European Union’s member states – an honor previously bestowed only on two US presidents and Russia’s head of state, Vladimir Putin. It was meant to be a sign that China had arrived in the heart of Europe.

But the summit is no longer taking place. Chancellor Angela Merkel's office said the "general pandemic situation" was the reason for the cancellation. But none of the issues on the meeting’s agenda (an investment agreement, climate protection, Africa)   had much chance of success – even if a mid-June video-call between Merkel and Chinese Prime Minister Li Keqiang did see some new German-Chinese agreements struck in a digital setting.

Partnership with China is no longer the default position

EU diplomats continue to work their way through similar online exchanges with their Chinese counterparts to at least maintain the appearance of and chances for cooperation. But insiders reckon that less than a fifth of the agenda items jointly agreed last year have seen concrete results. And the EU-China Strategic Agenda for Cooperation, which is up for renewal in 2020, remains controversial. Here too, there is little to announce – indeed EU diplomats are finding it hard to develop any kind of positive agenda with China. Critics even say the European diplomatic service is trying to negotiate something that no longer exists

It seems to be dawning on some European policymakers that they may be acting their role in the wrong play. Partnership with China is no longer the default position. Over the next months, European policy towards China will face with three crucial decisions the EU cannot postpone any longer: What position will Europe take on Hong Kong? How will it answer the Huawei question? And, more generally, where does it stand in the US-China dispute?

Had the Leipzig summit taken place, it would likely have been necessary to conceal protestors calling for a free Hong Kong from Merkel’s Chinese guests – much like references to the demonstrations of 1989 that ushered in the demise of Communist East Germany. But protestors in Hong Kong will be hard to ignore as Beijing pushes through the new national security law for the city – a likely breach of international law and a certain breach of trust.

At the same time, Europe's digital sovereignty is at stake in the Huawei question: Should the Chinese telecoms equipment supplier play a dominant role in the new 5G network across EU member states? Worryingly, the special interests of some companies and tactical indecision at the top of the German government are still preventing a clear, unified European answer.

No either-or decisions

The conflict between the US and China demands that Europe act prudently to avoid getting crushed between the two. But a recent plea by Mathias Döpfner, a German media executive, for Europe to decouple from China and align exclusively with the USA is not a wise policy.

All these issues demand real answers, not either-or decisions.

When it comes to Hong Kong, there is real scope for joint action by Europe and like-minded G7 and regional partners that would not burn our bridges with Beijing. In the Huawei case there could also be a kind of “positive no” – a principled no to the company having any part in Europe’s 5G network in the future, but not a total ban on Huawei doing business in the EU. Acting promptly would give the Chinese side the opportunity to help shape this new game – perhaps by allowing European companies access to the Chinese market on an equal footing with domestic players.

In US-China relations, Europe’s top priority must be to preserve room to maneuver. Many European decision-makers continue to ignore how specific and substantial the decoupling effects – the impact of the USA’s economic decoupling from China – will be in the coming months. Any fixation on US President Donald Trump risks obscuring the fact that the Endless Frontier Act is already giving innovation in the US new impetus – and that prescient Democrats for months have been thinking about what a better China policy might look like and what partners it might include. Who in Europe will take the initiative to work with our new partners in Washington behind the scenes? To represent Europe’s interests and help shape a much needed 100-day plan for a transatlantic China policy in the post-Trump era?

To continue propagating the traditional line that there is no alternative to our current China policy is not only tactically imprudent. It is also factually wrong and fed by a dubious narrative of economic dependence on China. On the contrary, China is dependent on Europe – and urgently so on large German companies that create jobs and drive innovation.

If Europe is to emerge from the Covid-19 crisis more digital, green and resilient, it needs strong leadership and a political leap. It is encouraging that EU Commission President Ursula von der Leyen now wants to take the lead on China policy in Brussels. But if Beijing refuses to play its part and acts as a rival on strategic and fundamental issues, Europe will have to take perhaps its most crucial decision – to make do with less China.

This article was originally published in German in Zeit Online on 29 June 2020.