Sino-European Relations: A Three Point Action Plan

Introduction

The relationship between the European Union and China has become increasingly complex. While Brussels believes China, under the leadership of the Chinese Communist Party, is a systemic rival and an economic competitor; it also considers Beijing a strategic partner on key issues, particularly in the global fight on climate change (European Commission, 2019). Consequently, the EU approach towards China has become a balancing act, one that is becoming increasingly unstable as a result of Beijing’s behaviour.  

As highlighted by Edward Lucas (2020), a Senior Research Fellow at The Centre for European Policy Analysis, the goal for Western democratic countries should not be to overthrow the CCP, for the risks are too great and too dangerous. Moreover, China is too closely integrated into supply chains and financial markets, and is an important partner on major issues including tackling climate change. Therefore, the West, and in particular the EU, must seek to restrict China’s most damaging behaviour by setting global standards and addressing the country’s human rights abuse of the Uyghur people in China. Europe must also find a way to ‘level the playing field’ with Beijing for business and counter China’s advantage in the EU market. This paper suggests three main areas the EU must prioritise their focus on, as Europe strives to achieve these aims.

I. The EU-US Relationship

Since it became clear Joe Biden had won the United States election last month, the EU have demonstrated a desire to move forward from the tensions between the two powers (primarily caused by Donald Trump), and restore better relations between Brussels and Washington. The EU recognizes that Biden, unlike Trump, believes in multilateral order and in turn will seek to repair international institutions (Fleming et al., 2020). The EU also knows that unlike his predecessor, the President-elect will not adopt a ‘go at it alone’ approach when it comes to China, for Biden was quick to commit to allying with Europe (and other global partners) as the US tries to gain more leverage in pushing back against Beijing (Lawder, 2020). This provides Brussels with an opportunity to coordinate with Washington in their responses to China, after growing frustrated with Trump and his administration’s unilateral trade measures over the last four years.

At the beginning of December, a paper titled ‘A new EU-US agenda for global change’ was produced jointly by the European Commission and the EU’s High Representative for Foreign Policy. The document reflects European aspiration to work more closely with the US as they face the “strategic challenge” posed by China (European Commission, 2020). The EU is concerned the breakdown in the transatlantic relationship has handed Beijing the “geopolitical initiative”, and so Brussels must look to repair and strengthen the relationship as quickly as possible (European Commission, 2020). This recent publication from the commission suggests this is exactly what the EU will aim to do, as they have promptly identified several potential areas for EU-US collaboration, including screening of Chinese investment in European/US companies, and 5G technology. Also reflected in the plan is the EU’s desire for closer transatlantic cooperation in order to set global standards, particularly digitally.

It is clear that if the EU wants to effectively respond to the challenges posed by Beijing it must work more closely with the US. The fundamental reason as to why this has not happened already is down to Donald Trump and his reluctance to work with Europe on China, which has contributed to the weakening of the relationship between the two powers. However, while there remains considerable work to be done in order to repair the transatlantic relationship, there have been signs since Joe Biden won the election in November indicating that both parties wish to do so. The early signs also suggest a stronger partnership between the EU and US will include more meaningful cooperation on China too. 

II. Indo-Pacific Strategy

The recent border clashes between China and India, and the intensifying of the competition between Washington and Beijing in the South China sea, has increased the likelihood of disruption within the Indo-Pacific area. This would endanger European trade and risk a financial crisis meaning that it is imperative the EU adopts a meaningful Indo-Pacific strategy. By doing so, Brussels will be able to protect its financial interests while increasing the EU’s profile as a “security provider and strategic partner” to its Asian allies (Iuppa, 2020). The significance of the region has already been recognized by some individual EU Member States such as Germany, France and the Netherlands, as all three have recently introduced individual Indo-Pacific strategies. The region also offers the EU plenty of economic opportunity as the Indo-Pacific nations generated more than 20 per cent of global GDP in 2019 (Payne, 2020). Therefore, a more purposeful strategy to the Indo-Pacific would be an important step forward in cementing Europe’s role in the region by utilising the EU’s “financial, regulatory and intellectual leverage” (Iuppa, 2020).

However, the EU does not need to antagonise China as it pursues its own strategy in the Indo-Pacific region. Brussels should clearly define its own policies while increasing cooperation with countries in the Indo-Pacific on both a bilateral and a multilateral basis, seeking cooperation with the new US administration when necessary (Oertel & Small, 2020). At the centre of the EU’s strategy should be a strong focus on developing connectivity within the region, building networks and setting standards from green technology to infrastructure financing. This would provide the EU with a foundation to collaborate with Indo-Pacific partners while striving towards policy goals.

If the EU is to expand its influence within the Indo-Pacific region, then strengthening ties with major players in the region is essential. India, after their own difficulties with China in 2020, could prove to be a valuable partner in the region for the EU on a variety of key areas including supply chain initiatives, 5G technology and maritime security (Oertel & Small, 2020). Equally, India’s GDP is now experiencing a significant decline due to the impact of the pandemic and so may be enthused by greater economic cooperation with the EU as an economic player in supporting its recovery. Furthermore, the EU must deepen ties with other regional powers who are also wary of Chinese aggression, including Australia, New Zealand, South Korea, Japan, Indonesia, Singapore, Malaysia and Vietnam. 

III. A More Collective EU Approach

As highlighted in an article on Sino-European relations that I wrote in June, differences in political opinion on China among Member States make it challenging for the EU to implement a more robust and collective China strategy (Gurney, 2020). The 17+1 initiative jeopardises European unity while some EU Member States including Germany benefit from large trade relationships with Beijing, creating different conflicts of interest amongst Member States. However, it could be argued that a more cohesive approach to China is becoming more likely. A mix of Beijing’s mishandling of the Covid-19 pandemic, the CCP’s increasing assertiveness and human right abuses has led to some indication that Europe may be beginning to unite on China (Trinkwalder, 2020).  Although this shared outrage from European countries towards China’s behaviour is still a stretch from a common EU strategy, it does suggest there is potential for one.

Over the last year or so, there have been many debates on the introduction of a more robust EU approach towards China, and often these include discussions on the implementation of a set of defensive economic instruments, as the EU looks to protect its interests. These discussions reflect a growing concern in Europe regarding the acquisition of strategically important companies across the continent, particularly by Chinese businesses and investors. Consequently, an EU regulation came into effect in October with the aim of protecting European interests against foreign investment by enhancing cooperation on the matter between Member States and the European Commission (EUR-Lex, 2019). Under the new regulation, Member States or the Commission can raise concerns regarding any proposed investment within a Member State which must be considered by the state in question. While this is not legally binding, nor a centralised EU investment screening tool, the regulation has been described as a milestone in forging a comprehensive EU approach to tackling targeted foreign investment in strategic sectors, and may lead to further action (Reuter, 2020).

While EU Member States have become more sceptical about China, there remains reluctance for “across-the-board confrontation” (Fleming et al., 2020). Some European countries, such as Hungary, have developed strong ties with Beijing, and twelve EU Member States remain part of China’s 17+1 initiative. Therefore, it is up to Brussels to try to include these Member States while moving forward with talks on a new EU China strategy. It is important the EU attempts to include more voices from Central Eastern Europe into these discussions through the introduction of high level working groups on policy priorities related to Beijing (Rühlig, 2020). By doing so, Brussels may be able to monitor and/or raise awareness of Chinese activities within the 17+1 initiative while Member States work towards a consensus on China. The EU could also try to incorporate existing concepts from the region, such as the Three Seas Initiative (Rühlig, 2020).

This paper has mentioned just a few ideas on how the EU may work towards a consensus amongst Member States on China. What may or may not be the most effective tools to achieve this goes beyond the scope of this piece of work, but what remains clear is the EU could and should do more to overcome the obstacles preventing a more robust EU approach towards China. For example, the introduction of qualified majority voting in the European Council for foreign and security policy decisions would create “a more principal EU foreign policy”, which would allow for faster and more decisive action, such as imposing sanctions (Rühlig, 2020).

Conclusion

The recent North Atlantic Treaty Organisation ‘NATO 2030’ report reflects a more assertive shift in the West and in Europe, on China over the last 12 months or so. The paper highlights China as an emerging threat while proposing several recommendations for the alliance to adopt (NATO, 2020). Similarly, since the 2019 ‘EU-China A Strategic Outlook’, the EU’s tone on China has moved towards a more hawkish stance (European Commission, 2019). And so, it is evident there is political will for the EU to establish a tougher approach towards Beijing; by setting global standards and advocating against human right abusers, while ‘levelling the playing field’ with China. If Brussels is to be successful in achieving these aims then it must utilise the opportunity to work closely with the US on Beijing, develop an Indo-Pacific strategy and conquer barriers preventing a more robust EU strategy on China.

References

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