When the EU engages Global China, it should be Europe First

Frankly Speaking

Picture of Shada Islam
Shada Islam

Managing Director at New Horizons Project

One-dimensional groupthink on Europe-China ties makes good headlines but it does not reflect the complexity of their multi-faceted relationship, says Shada Islam.

Global China is challenging Europe. And now it seems Europe is challenging Global China.

Or is it?

With the EU-China Summit on April 9, Chinese President Xi Jinping’s much-publicised recent visits to Italy, Monaco and France and the upcoming Belt and Road Forum in Beijing, the world has been served a rich menu of news, comments and critiques of China’s expanding global outreach.

It’s a simple narrative: while ‘naive’ Europe sleeps, a self-confident and assertive China has been trampling all over the continent, pockets full of money, snapping up European ports and airports, high-tech giants and any other lucrative deal on the horizon.

A popular updated version says Europe’s new strategy on China, with its reference to ‘systemic rivalry’ with Beijing, proves that American pressure is finally paying off. Europe is awakening from its slumber and striking back at China’s ruthless efforts to divide and rule Europe.

One-dimensional single narratives make good headlines. The storylines are familiar and reassuring, harking back to an unchanged world when the West ruled and the East still listened dutifully.

There were rule-makers and rule-takers. There were big guys and small fry. The Asian Century was a nice concept, fun to discuss and debate but also easy to shrug off as over-exaggerated hype. Life really was simpler.

Times have changed. Europeans will need to stand firm against US demands that they choose between Washington and Beijing. The era for making binary choices has long gone. And Europe has no interest in starting another Cold War.

Asia’s economic rise is a fact of economic life and daily business. Whether in trade or politics, Asian nations are weaving ever-more intricate intra-regional links.

Wariness of China’s economic might has not stopped Japan or India from working with Beijing. Some in the region are ‘thinking the unthinkable’ and preparing for a future without America’s security umbrella.

The Asian Century was a nice concept, fun to discuss and debate but also easy to shrug off as over-exaggerated hype

Simple, one-dimensional groupthink sits uncomfortably with these and the other realities of today’s complicated and interconnected world.

 So here’s a brief and incomplete, alternative, interpretation of Europe-China relations in the coming decade.

It’s going to be complicated. The reality of the multi-faceted EU-China relationship is infinitely complex, intricate and sophisticated – and will remain so as both China and Europe adapt and adjust to each other and to a changing global landscape.

Despite US warnings about ‘containing’ China, Brussels and Beijing will stay engaged. But their relationship won’t be a walk in the park.

Competition and cooperation will continue to be the hallmark of EU-China relations. Sporadic feuds will be interspersed with moments of complicity and understanding.

Given China’s differing political and economic outlook, its search for new technology and the ever-expanding Belt and Road Initiative, Europeans will continue to view China as a rival and competitor.

Differences over human rights, the rule of law in the South China Sea, the power of state-owned enterprises, Internet freedoms and rules governing cyberspace will continue to sow discord.

But China and Europe will cooperate when needed, especially on tackling global challenges on climate change, Iran, North Korea and Agenda 2030.

Both are serious about preserving the much-frayed multilateral rules-based order. China will have to walk the talk on contributing to the reform of the World Trade Organisation, particularly with regard to difficult topics like subsidies and state-owned enterprises.

Europeans will continue to demand a level playing field in trade and investments, with Beijing coming under continuing EU pressure to speed up negotiations on a first-ever EU-China bilateral investment treaty.

China’s rise will keep Europe on its toes

There will be more and more European demands for reciprocity in market access. Interestingly, these EU-China conversations will tie into the concerns voiced by many Chinese experts on the need for more domestic economic reform, enhanced intellectual property protection and greater space for private enterprises.

Even as they grumble about market access and investment restrictions in China, European businesses will continue to make money there. A trade relationship worth more than €1bn a day isn’t that easy to tear up. 

China will take new market-opening measures and enact investment laws meant to ease tensions between Washington and Brussels – but these steps are unlikely to create the level playing field that Western companies hanker for.

China’s rise will keep Europe on its toes. Dealing with China – and other rising Asian powers – will spur the EU to follow up on recent decisions relating to investment screening and the security of 5G networks. This will necessitate the implementation of tougher procurement rules and measures to address the distortive effects of foreign state ownership and state financing in the EU single market.

Forget any illusions about a ‘one voice’ Europe dealing with Beijing. EU states won’t always see eye-to-eye on China-related issues, giving additional fuel to complaints that EU states – including the ‘16+1’ countries – are being divided by a wily China.

Finally, China and the EU will slowly but surely start to work together on Euro-Asian connectivity projects. China will acknowledge that, given the pushback on BRI in several Asian and African states, its unilateral approach to connectivity would be better served by multilateral cooperation and internationally-agreed norms on sustainability and transparency, while the EU decides that the BRI can – under the right conditions – really become a tool for global development.

Leaders attending the upcoming EU-China Summit would be well-advised to underline these points. Above all, they should reject binary choices and stay out of the epic ongoing Sino-American strategic competition.

Asia’s rise is unstoppable. European engagement with the region in trade, security and on global challenges is growing and is mutually beneficial.

Whether America and China tear themselves apart or end up holding hands, responsible leadership demands that when engaging with Global China, EU leaders put Europe First.

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