Why Europe can't walk away from China
China is not the most ideal partner, but the US isn’t much better.
Macron’s visit to China was an unmitigated disaster. At least, that’s how the Western press tells it. Macron is trying to salvage his failed attempts to prevent Russia’s invasion of Ukraine, and regain his place on the world stage, argues Politico. His remarks about keeping out of the US’ beef with China over Taiwan have caused ripples in Europe, with other leaders quick to point out that Macron did not speak for them, and that his actions are divisive at a time of war in Europe.
British paper The Telegraph (somewhat ironically) seems to agree:
“At a moment when Western democracy faces an existential threat from the expanding power of autocratic regimes, its leaders should be pooling their resources to defend themselves, not indulging in obsequious behaviour towards hostile states.”
But as much as the US would like the EU to view China with as much distrust and ire as they do, the EU - whether that be the unit as a whole or individual member states - just can’t seem to pull away from China. While head of the EU Commission Ursula von der Leyen has a close relationship with Biden and has a ‘bad cop’ impression when it comes to China, she merely accompanied Macron on his trip as opposed to leading a delegation on behalf of the EU. It was very much Macron’s trip, after which he vocalised his desire for the EU to become more autonomous and decrease its reliance on the US.
Ursula von der Leyen gave a speech in March just before her China visit about how the EU will manage its relationship with China moving forward. She was firm but cautious, pointing out that while the aim is not to pull away completely, they are wary of China’s aims to draw more international power towards itself. So why is it that though she acknowledges that China is trying to “change the international order with China at its centre”, she and other European leaders cannot seem to pull away from China’s gravity? Is it a lack of will? Or a lack of ability?
Or is China merely becoming a more desirable option in a bipolar world?
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China vs the US
All over the world, China is making a concerted effort to become a major economic power and diplomatic player. In a recent podcast I discussed how China is trying to become a peacemaker, replacing the US which it constantly accuses of ‘long-arm jurisdiction’ and meddling in the affairs of others. By way of contrast, China is often smeared as a distrustful trade partner that inserts spyware into exports in order to spy on their rivals and steal trade secrets. But these warnings (mainly from the US) have failed to act as a deterrent, even for the wariest of Western states. Even if countries wanted to shift manufacturing or shipping away from China, their competitors don’t have nearly enough infrastructure or capacity to compete. China is also breaking into important fields - while the world still relies on Taiwan for over 90% of advanced semiconductors, China produces 35% of the market total, and even most major US companies get around a quarter of semiconductors from China.
But China is in no way an ideal superpower partner for the EU. It’s not exactly been smooth sailing in China over the past few years, a problem that’s put a strain on China’s relationship with Europe. Forced lockdowns, perceived human rights violations, protests on the mainland and in far flung provinces leave a sour taste in western observers’ mouths. China has problems with population decline, a faltering housing market, youth motivation, and is even having PR struggles when it comes to the Belt and Road Initiative. In terms of trustworthiness, China is still not a match for Europe’s lifelong partner the US, who in many respects also serves as their saviour.
The US and EU are not just spiritual allies either. When it comes to military alliances, the addition of old Soviet rival Finland means that there are now 22 EU member countries in NATO. They are now working to protect Ukrainian interests against Russia, currently China’s closest ally. The EU simply doesn’t have a natural connection with China like it does with the US, as China was not a major WWII ally from a Western point of view, and was actively demonised by the US for becoming a communist state during the Cold War. The US is still the EU’s largest trading partner, a relationship that has only strengthened since the pandemic, and acts as a mutual driver of growth for both sides of the Atlantic.
But while the EU’s trade with the US overall is more established, there are substantial differences in the balance of trade with China. The EU is a net exporter of goods to the US, but it is a net importer of goods from China, and the deficit is only increasing year on year. In 2022, the EU had trade deficits in energy (€2.4 billion), chemicals (€28.5 billion), other manufactured goods (€163.6 billion) and machinery & vehicles (€214.3 billion). Around 18 EU countries are involved in the Belt and Road in one way or another, while China is openly seeking greater FDI from business leaders in the West. China is quite literally making inroads into Europe.
The US’ economy has been struggling to balance continued GDP growth with runaway inflation. There are jobs, but people don’t seem to want them as Americans are more unproductive than ever following the pandemic. It doesn’t help that about half of all Americans think they are worse off than they were a year ago, and in general the population is not optimistic about the economy. There’s certainly a feeling that the rich are getting richer, while the middle class shrinks and the working classes disappear. Of course, it’s difficult to do a like-for-like comparison as we’re not privy to Chinese citizen’s opinions about their own economic prospects. But this really only makes the US look worse - no news is good news after all.
The US also struggles to show political unity, one of China’s strong points. It shows in their hot-and-cold attitude towards China, which is often clearly hypocritical. While political relations have hit an all-time low due to tensions over Taiwan and spy-balloon incidents, trade is at an all-time high. As much as they despise it, the US imports more from China than from any other country, and China is one of the largest export markets for US goods and services. All this despite an apparent trade war. If the US can’t be consistent in their attitude towards China, how can they expect the EU to be?
A house divided
Brexit aside, something that should be considered is whether or not the EU is a single unit when it comes to international relations. The 27 member states have different cultures, some have weak economies while others are doing better, and while having a democratic political system is a requirement, having the same political alignment isn’t. All of these things are causing rifts among member countries, including how to handle relations with China.
While some countries have bounced back just fine from the financial crash of 2008 (remember that guys), many EU countries are still lagging, and some are suffering other problems on top of economic ones. Economic woes in Italy, Spain, Greece and Malta are also contributing to other problems like involuntary childlessness as women delay or even give up on having children because of financial struggles. Italy is also dealing with an influx of over 100,000 migrants a year, many of whom are coming to the country illegally via dangerous waters. Young people have few or no opportunities, young couples are stuck in limbo, and young entrepreneurs struggle to break into the market. Partnerships with China may help change that.
Italy, one of the developed countries that has struggled the most in recent decades, is notably relying more and more on China’s support to prop up its economy. The only G7 country to join the Belt and Road Initiative, Italy signed a Memorandum of Understanding worth over €2 billion in 2019, and though covid has delayed things, relations between the two are cordial. Italy at least isn’t as suspicious of Chinese tech as the US would like. Chinese telecom firm ZTE has set up its European base in Italy and is helping with the roll out of 5G there, which will no doubt contribute to Italy’s ambitious plans to build more smart cities.
There’s also the political element. Certain nations’ precipitous slide to the right has not gone unnoticed by the typically left-leaning EU centre, who have condemned Viktor Orban’s racist and anti-LGBT+ stance, and worry that Swedish presidency of the EU will be overshadowed by anti-EU rhetoric from right-wing Democrats. Many far-right parties in EU countries also advocate for leaving the union. Not only do these countries not necessarily align with liberal Western European political norms, their conservatism and patriotism tend to align quite nicely with the values that China espouses. Even traditionally lefty governments like France have gone a bit ‘authoritarian left’ on the political compass recently, meaning leaders like Macron increasingly have more in common with Xi, and may continue to prioritise cordial relations with China over the US, and the Yuan over the Dollar.
The question isn’t really whether or not China is ideal, however, but rather whether China can replace the US, both as an economic partner and a political ally. Considering recent developments, it’s certainly a possibility. And for some EU countries, it’s already become a reality.
A grand transition?
Ursula von der Leyen has said that Europe is not trying to decouple from China, but “should instead look into diplomatic and economic ‘de-risking”. It’s difficult to know what this means, but what’s sure is that the situation is fraught. Considering the EU’s stance on human rights and democracy, the situations in Xinjiang, Tibet, Taiwan and Hong Kong should be causes for concern. The ongoing situation in Ukraine and China’s tacit allyship with Russia makes it awkward to approach China head-on to say the least.
And yet individual leaders are making overtures to China for their own reasons. It would be nice if the EU could be completely united in its foreign policy aims, but at the end of the day it is made up of individual countries with their own unique problems. It seems China may be trying to pick off the weakest members of the bunch one by one, but it still has some way to go yet. When it comes to the battle for the hearts and minds of the European people, the US is certainly winning for now.
There may well be a twist in the second round.
Sinobabble extended universe
The latest podcast episode is all about why China and the US are unlikely to go to war over Taiwan. Listen here, on Spotify, Apple Podcasts, Google Podcasts, and Youtube.
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