EU rings alarm bell on China — but isn’t sure how to respond – POLITICO

It’s not the kind of talks China wants in Brussels — let alone on the cusp of President Xi Jinping extending his reign.

Just a day before the Communist Party Congress ends on Saturday and Xi is essentially appointed China’s leader for life, EU leaders officially began a collective rethinking of the bloc’s increasingly strained relationship with China, demonstrating a sense of the urgency that had not existed prior to the Russian war against Ukraine.

In a three-hour conversation, the 27 EU leaders took the floor at the European Council meeting in Brussels to express their growing concerns.

But while the diagnosis was unanimous — Beijing has become increasingly belligerent on both the military and economic fronts as it adjusts to a warmongering Russia — the recommended treatments have varied.

Some equated the situation with the EU’s miscalculation of its relations with Russia. Others balked at the direct parallel, but nonetheless urged the EU to reduce its reliance on China’s technology and raw materials. Then there were those – notably German Chancellor Olaf Scholz – who insisted that the EU must remain a beacon of global trade, even with China.

The differing opinions reflect the difficulties the EU will face in the coming years as China moves from an imminent threat to an immediate one.

“We must not repeat the fact that we have been indifferent, indulgent and superficial in our relations with Russia,” Italy’s outgoing Prime Minister Mario Draghi said in a final press conference, relaying the message offered by many leaders during the discussion.

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“Those that look like business relationships,” he added, “are part of an overall direction of the Chinese system, so they need to be treated as such.”

Belgian Prime Minister Alexander De Croo echoed Draghi’s concerns.

“In the past, I think we’ve been a little too complacent as European countries,” he told reporters. “On some domains [China is] a competitor – it’s a fierce competitor. On some domains we also see that they show hostile behavior. … We should understand that in many economic areas it is also geostrategic.”

EU Commission President Ursula von der Leyen went further and gave Xi a personal thumbs down.

“We’re seeing quite an acceleration of trends and tensions,” she said. “We have seen President Xi continue to affirm China’s very assertive and self-reliant course.”

Even the basically pro-Beijing Hungarian Prime Minister Viktor Orbán agreed that the EU should become “more autonomous” during the discussion, according to another EU diplomat.

And Chancellor Olaf Scholz – who is planning a trip to China next month and will be the first Western leader to welcome Xi as the newly reappointed leader – also warned fellow EU leaders about Beijing’s economic future over the phone-ban talk, according to a senior diplomat.

Scholz told his fellow leaders that China could well be the source of the next global financial crisis, while the country risks falling into what economists are calling a middle-income trap, the diplomat said.

But while everyone was keen to put their China worries to the winds, they were at odds over how to address those fears.

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The Baltic countries, whose years of warnings of Russia’s revanchist intentions have fallen on deaf ears in much of Europe, are pushing for a tougher stance on China.

“The more threats they face from Russia, the less interested they are in working with China,” said one diplomat, referring to the Baltic countries.

Lithuania, for example, became a target of China’s trade embargo after it began developing closer economic ties with Taiwan. Earlier this year, Estonia and Latvia followed Lithuania’s move to leave Beijing’s 17+1 economic club, which they criticize as a Chinese attempt to split EU countries.

Conversely, despite the geopolitical shifts, Scholz continued to defend Germany’s need to trade with China. Echoing Trump-era rhetoric, he flatly rejected the notion of “decoupling.”

“The EU prides itself on being a union interested in global trade and does not side with those who promote deglobalisation,” he said.

Just this week, Scholz reportedly backed a deal by Chinese state-owned shipping giant Cosco to buy a stake in the port of Hamburg – despite stiff opposition from within his own government.

When asked about the port deal, Scholz only said in a press conference that “nothing has been decided yet” and “many questions” still need to be clarified.

Possible frustration with Scholz’ trip to China, to which he also wants to take a business delegation, was also reflected, albeit implicitly, in the top EU meeting. Latvia’s Prime Minister Krišjānis Kariņš, for example, said that China “will be treated best when we are 27, not when we are… one on one.”

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Moreover, EU countries are, as always, at odds on how closely to align themselves with the US’s more anti-Chinese stance, particularly after President Joe Biden’s administration described China as his country’s “most momentous geopolitical challenge”.

While Dutch Prime Minister Mark Rutte supported calls for cooperation with the US on technology development, he warned against Americanizing Europe in dealing with relations with China: “It is important that Europe acts as confidently as possible, but also acts independently, and that there is equality, reciprocity, so that we are not some kind of extension of America, but that we have our own policy towards China.”

Finnish Prime Minister Sanna Marin, meanwhile, called on the EU to work with all democracies against China’s tech rise.

“We shouldn’t build such strategic, critical dependencies on authoritarian countries,” she said when asked about the EU’s concerns over China. “We would need in the future [to] Work with other democratic countries to build these types of export routes together [the] United States, with Great Britain, with Japan, with South Korea, Australia, India, New Zealand for example.”

Hans von der Burchard and Barbara Moens contributed to the reporting.

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