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EU is finally putting its money where its mouth is on China

Now, a more coherent European strategy is looming, through a series of policies that have the clear ambition to counter China, regardless of what that might mean for investment in Europe.

Last week, the European Commission unveiled a plan called “Global Gateway”, aimed at investing 300 billion euros ($ 340 billion) around the world by 2027 in infrastructure projects, digital connectivity and fight against climate change.
Although the plan does not mention China, it is difficult to see in this announcement anything other than a direct alternative to Beijing’s Belt and Road Initiative (BRI), a vast trade and infrastructure project that would link the economies from Jakarta to Rotterdam via Nairobi. Commission President Ursula von der Leyen said the gateway offered a “real alternative” to China’s BIS, which has been accused of indebting some countries with huge debts since its inception in 2013.

The BRI was once seen by some in Europe as a way to inject money into the continent while modernizing its infrastructure, but Beijing’s authoritarian turn at home and hostile foreign policy abroad in recent years have led to radically rethink whether having Chinese state-backed companies with significant stakes in critical infrastructure – or allowing European countries to get into debt to China – is the best place for Brussels.

The Global Gateway follows an EU proposal to strengthen its military capabilities independent of NATO and the “Indo-Pacific Strategy,” a plan to strengthen European influence in the geographic area in which China holds significant power.

There is no doubt that these stricter policies will annoy Beijing. “China loves Europe when it sits on the fence,” says Theresa Fallon, director of the Center for Russia, Europe and Asia Studies. “They liked it when Europe wanted a little more autonomy from America and that a closer relationship with China was part of it. Now the idea of ​​Europeans participating [US President] Joe Biden’s democracy summit, which will point the finger at China, is much less comfortable. ”

The EU’s new assertiveness did not come about suddenly, rather it was the culmination of years of attitude change. In 2019, the European Commission released a document calling China a “strategic rival”. Over the next two years, Europe slowly determined how it treats a rival with which it has so many ties and with whom it always wishes to partner in other areas.

Charles Parton, former first adviser to the EU delegation in Beijing, believes that Brussels’ previous inaction was largely due to the fact that for a time EU leaders could get away with doing nothing.

“The reality was that citizens weren’t putting enormous pressure on politicians to do anything. Uyghur persecution or repression in Hong Kong. When Europeans met Xi Jinping, they said they had brought up human rights, everybody nodded and then they did get down to business, ”he said.

But pressure has grown steadily on European leaders to hold China to account. And while anti-Chinese sentiment has been mounting across the West for years, the ruling Communist Party’s handling of the early stages of the Covid-19 pandemic has also led to a record level of negative views towards the country, according to Pew.
Rightly or wrongly, many Western politicians have described China as being responsible for what happened. And Beijing has not helped this perception by pushing disinformation about Covid. Now politicians and citizens are more likely to see China for what it really is, ”Parton said.

Historically, it has also been difficult for Member States and EU institutions to agree on a common policy towards China. To complicate matters further: China is the largest trading partner of the EU’s richest and arguably most powerful member state, Germany. German diplomats have historically played down tensions with China and in economic matters, German ministers are listened to attentively by everyone in Brussels and will often set an agenda that is followed by other member states.

“Because EU foreign policy requires unanimity, you are forced to move forward at the pace of the slowest member state,” said Ian Bond, director of foreign policy at the Center for European Reform. “China managed to throw carrots in front of the member states who luckily seized those carrots.”

Bond also notes that former US President Donald Trump’s unpopularity in Europe, combined with his outright hostility to China, has encouraged the EU to work more closely with Beijing at a time when the Europe was actively pursuing a foreign policy independent of America.

“Sometimes when the wrong person says the right things, it can have the opposite effect of what you intended. I think initially Europe saw working with China as an opportunity, in light of instability in the US In 2019, they realized that was a mistake, ”says Bond.

Former US President Donald Trump (left) and Chinese President Xi leave a business leaders event at the Great Hall of the People in Beijing in November 2017.

Today things are different. The G7 countries are all more hostile to China, which Fallon said “embarrassed” EU officials at the last summit. “It was clear that everyone had started to view China as a serious threat and the EU suddenly seemed very complacent on the issue,” she said.

The Commission, which in recent years had adopted a cooler stance on US-EU relations, is now visibly trying to give Washington a strong hug. “America will always be an important partner of the EU. It is a like-minded country and we have alliances on almost all issues,” an official told CNN this week.

Parton also believes that more and more European leaders have realized that Beijing’s bark is worse than its bite, pointing out that countries that have been in the niche for hosting the Tibetan Buddhist leader the Dalai Lama – who is considered a “separatist” by Beijing – did not suffer as much as feared, China’s response being more subdued than its threats.

Another major red line that Europe seems more and more comfortable to cross is to move closer to Taiwan, an autonomous country. Mainland China and Taiwan have been governed separately since the end of the Chinese Civil War over 70 years ago. Taiwan is now a thriving multi-party democracy, but the ruling Chinese Communist Party on the mainland continues to view the island as an inseparable part of its territory, even though it has never controlled it.

While a Commission official told CNN that official Brussels policy is still “One China” – loosely described as support for the status quo – the EU sees Taiwan as an attractive partner with which it expects. work more closely – at the same time tensions between Taipei and Beijing are increasing.

In October, the European Parliament adopted a major bill aimed at strengthening relations with Taiwan. This was followed by the arrival of a delegation of seven Members of the European Parliament in Taipei in November. Several member states have also made it clear that they support Taiwan, with Lithuania hosting a de facto embassy and Baltic lawmakers visiting the island. A Lithuanian lawmaker said there was “broad support” in his country for closer relations with Taiwan.

On top of that, Parton says the pandemic’s toll on the Chinese economy and growing economic headwinds means he will be even less able to use money as a weapon in the years to come.

Officials gather near the stage ahead of the Forum's opening ceremony

It is undeniable that the recent proposals and positions taken by Brussels are ambitious and will be poorly received in Beijing. The question is, what happens now?

As Bond notes, any major foreign policy requires unanimity among member states, and China has done a good job of turning the heads of some leaders, including Hungarian Viktor Orban, whose plans to build an overseas branch. of a Chinese university in the Hungarian capital of Budapest sparked protests over the summer. The government has since announced that it will hold a referendum on whether to implement the university project.

However, the change in public opinion towards China is having an impact on European leadership. Fallon believes that in countries that have historically been in favor of economic partnerships with China like France and Hungary – both of which have elections soon – the political opposition will be able to capitalize on public hostility.

The danger is not that there isn’t a coherent Chinese strategy, but that a plan is watered down so much that it’s not worth the paper it’s written on.

In the case of Global Gateway, it could be private sector companies unwilling to fund huge infrastructure projects that don’t make money. When it comes to security, countries in southern Europe may appreciate Chinese money and not geographically view it as a threat.

For now, Chinese hawks are happy that Brussels is trying to stop trampling on its lofty ambitions to promote democracy, human rights and free trade, blinded by the signs of the Chinese yuan in their eyes.

What remains to be seen is whether EU bureaucracy and processes stifle this ambition, and whether once the pandemic begins to recede, Europe returns to its nasty habit of turning a blind eye, even if it does. harms its own long run. interests.