EU-China: A pragmatic handshake

This result surprised observers because not long ago, Europe still considered Beijing a “systemic rival”. So what was the catalyst for the relationship to change from rival to partner?

Win-win

It can be said that the annual meeting, attended by Chinese Premier Li Keqiang and top EU officials, which took place in Brussels (Belgium), is a "test" of the relationship between the EU and China. This year's meeting took place at a sensitive time, a month after the European Commission assessed Beijing as a "systemic rival" in a special report with 10 points emphasizing China's failure to show an open attitude on trade. The conference also took place in the context of many major issues raised for Huawei Group when the US wanted the EU not to do business with this company.

From left, European Council President Donald Tusk, Chinese Premier Li Keqiang and European Commission President Jean-Claude Juncker at the EU-China Summit in Brussels. Photo: Xinhua.

The tense atmosphere of the Conference prevailed until the last minute. Even before that, there were many speculations that the conference would have difficulty issuing a joint statement because EU members had not yet agreed on their stance and views on a rising China. The joint statement was finalized after intense negotiations at the last minute. In the joint statement, the two sides set a target of completing the EU-China Comprehensive Investment Agreement in 2020. In the 7-page document covering security, diplomatic and trade issues, the two sides committed to “broader and more convenient market access, without discrimination”.

The joint statement after the conference can be considered a success for the European Union, with a number of important concessions from China. China's agreement to expand market access, oppose forced technology transfer and cooperate in reforming the World Trade Organization on industrial subsidies is considered progress. Notably, for the first time, Chinese Premier Li Keqiang presented a "timetable" on the country's reform roadmap, in order to meet the EU's demands and affirmed that "words match actions". For Europe, these promises are the result of the recent tough stance at the negotiating table with China.

For China, the success of the 21st summit was a significant diplomatic victory, especially as EU leaders did not make confrontational statements and did not refer to China as a “systemic rival” or call its trade practices unfair. This shows that China’s “slow and steady” approach is working.

In recent years, Europe has been the target of Chinese leaders' attention in the strategy of expanding the Belt and Road Initiative. If initially only a few countries in Central and Eastern Europe responded to Beijing's policy because they benefited from huge investments, now the Western wing of the EU is also "going along" with this global initiative of China. Italy recently signed a series of bilateral agreements with Beijing to participate in the Belt and Road Initiative. Even countries like Germany or France have not declared that they will not participate in China's "Belt and Road" but are only demanding that China give clearer and more transparent explanations about the cooperation mechanism as well as the benefits that this mega project brings.

Catalyst

In reality, the relationship between China and the EU has many “bottlenecks”, from viewpoints, ideology to policies. For many years, the EU has maintained a policy of “both cooperation and struggle” with Beijing. However, there are many subjective and objective factors that force this bloc to be more flexible with the giant Asian economy. European countries themselves have been going through a challenging decade when the 2008-2009 public debt crisis caused a series of countries such as Greece, Spain, and Portugal to fall into economic difficulties. Eastern and Central European countries also need foreign investment capital for development purposes to catch up with more developed countries in the bloc. Therefore, China’s “olive branch” with huge investments has been warmly welcomed by many EU countries.

The US will impose tariffs on products imported from the European Union (EU), with a total value of 11 billion USD. Photo: Getty

For China, of course, the “gain” will be huge if it extends its “arm” to the “old continent”. Not only the economic aspect, strengthening relations with the EU also means that China increases its influence in the region which is the top ally of the US. This will be an advantage for China in the strategic competition for the position of the world’s leading superpower with the US.

However, in addition to economic and political factors, it is undeniable that President Donald Trump’s America is the “catalyst” that forces China and the EU to seek each other. The unilateralism of the United States, regardless of the interests of its allies, is increasingly widening the gap between the two sides of the Atlantic, forcing the EU to find new directions to ensure the security and economic interests of the bloc. Of course, the choice to join hands with China is largely aimed at solving economic problems.

Not only targeting China, the US has also expanded the trade war to its European allies. In the latest development, US President Donald Trump said Washington will impose tariffs on imported products from the European Union (EU), with a total value of 11 billion USD, on the grounds that "the EU has taken advantage of the US on trade for many years". Previously, the threat of imposing tariffs on aluminum and steel by a number of countries, including European countries, also caused "turbulence" in the relationship between the two sides.

Meanwhile, China is also one of the leading economic partners of the EU in general and each EU member state in particular. Therefore, if viewed from this perspective, it can be seen that both sides need to join hands to reduce the damage caused by the unilateral policy of the US. It is no coincidence that, right before the 21st EU-China summit, Beijing officials affirmed that they would join the Alliance for Multilateralism proposed by France and Germany. Although denying that this alliance is aimed at the US, everyone understands that the current Washington administration is challenging the global multilateral order. China's participation in this alliance with European countries shows that the two sides have common views.

Although there are still many doubts that cannot be filled overnight, for the practical benefit of both sides and for the goal of opposing the unilateral stance of the United States, China and the EU will try to narrow differences, ease conflicts and rebalance the bilateral relationship./.