Europe and China

Today’s summit between Europe and China, the last chance for Beijing?

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One of the latest reports of the European Court of Auditors identified 18 risks for the European Union stemming from China’s state-led investment strategy. The list is the first of its kind, identifies risks of a political, economic, social, legal, and environmental nature, stressing the danger that member states accumulate excessive debt to China or that companies are forced to transfer technologies to the Chinese. The main point, however, is that the document explicitly identifies the strategic issues posed by the Chinese New Silk Road project, and this represents a real turning point.

In recent times, the EU has adopted a tougher attitude towards China, to the point of identifying it as a systemic rival. Before now, however, attention had never been directed to the opacity of projects linked to the New Silk Road, which puts the entire EU-China agreement on investments into question. The Court’s report, published on 10 September, has a straightforward and sincere tone. It lists key-political risks, including Chinese ownership of strategic resources and national infrastructure, as well as threats to EU unity and cohesion. It stems from initiatives such as the 17 + 1 cooperation format with Eastern European countries (where they are 17 and +1 is China), which are used by Beijing to circumvent the dynamics of the Union. The New Silk Road projects represent a risk to the European Green Deal. While Chinese officials have publicly pledged their support for green cooperation, in reality, China in Europe continues to pursue highly polluting projects such as coal plants.

The report was released in time for the videoconference summit scheduled for today (September,14) between European Commission President Ursula von der Leyen, European Council President Charles Michel, German Chancellor Angela Merkel, and Chinese President Xi Jinping. The last time, in June, did not go very well. There was no joint press conference, and the EU did not obtain any guarantees from Beijing on human rights issues that included repression in Xinjiang, Tibet, and Hong Kong. This time it could be even worse. The summit of today could be the final nail on the coffin of the bilateral investment treaty. Since 2013, the EU has been negotiating with China to gain access to telecommunications, information and communication technology, healthcare, financial services, and manufacturing sectors. After the last round of talks in April 2019, the deadline was for the end of 2020. The European Chamber of Commerce in China said that after 30 rounds of painful negotiations, there is a feeling of now or never.

At the beginning of September, the European tour of the Chinese foreign minister, Wang Yi, did not have the hoped-for success. Wang has been to Italy, the Netherlands, Norway, France, and Germany. The reception was rather cold, indicating that the EU countries are inevitably becoming more united in adopting a position of mistrust towards China. In all his meetings, Wang criticized the new Cold War posture adopted by the United States and appealed to multilateralism. However, every European foreign minister (including the Italian one) has expressed unequivocal criticism of respect for human rights in China, in particular the German Heiko Maas. Furthermore, immediately after Wang’s departure, Germany officially adopted the strategic doctrine of the Indo-Pacific, declaring that the political West is also in the East and that freedom of navigation in the region is a priority of Berlin policy. The Indo-Pacific concept is the evolution of US geopolitical thinking, a concept in direct conflict with the Chinese idea of ​​the New Silk Road.

The German decision is significant and is in line with that of France, which also has military bases in the Indian and Pacific Oceans, marking the beginning of a path that will field a much less ambiguous and conciliatory European strategy than in the past. It is not a turning point with war tones. The EU wants to maintain flourishing trade relations with China, but without them becoming an instrument of political influence or posing questions of national security. The Coronavirus pandemic has suddenly highlighted the vulnerability of global value chains, and that having full control over the production of critical assets (in the health sector, but not only) is an issue that goes beyond the economy.

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