European leaders meet China’s Xi

French, German and European Commission leaders met President Xi amidst tensions over trade and security.

Background

Sino–European relations were established in 1975. According to the European External Action Service, the EU-China relations aim for cooperation in the areas of "peace, prosperity, sustainable development and people-to-people exchanges." The EU is China's largest trading partner, and China is the EU's second largest trade partner after the United States. The EU-China 2020 Strategic Agenda for Cooperation, reaffirms the EU’s respect for China's sovereignty and territorial integrity, while China reaffirms its support for EU integration. An annual EU-China Summit is held each year to discuss political and economic relations, as well as global and regional issues.

President Trump’s protectionist trade policy has affected the EU and China. After he imposed 25% tariffs on steel and 10% on aluminium with the EU, Canada, and Mexico, the EU responded by imposing its own import duties of 25% on a range of US goods. This was followed by a number of tit-for-tat measures that increased trade tensions between all parties involved. The EU has been caught in the crosshairs of the trade war between its closest political ally, the US and an important economic partner, China. Trump’s protectionist and offensive tactics against Chinese companies such as Huawei, has left the EU questioning their own policies towards China, especially pertaining to tariffs and security risks. Of particular concern is China’s Belt and Road initiative which Washington has termed a Chinese “vanity project,” and views with trepidation.

Analysis

Chinese President Xi Jinping has recently been visiting a number of European countries amidst increasing tensions over China’s belligerent actions in the South China Sea, security risks in employing China’s largest company Huawei and offensive economic policies. French President Emmanuel Macron invited German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker to meet the Chinese premier. The four world leaders highlighted their support for multilateralism and the need to elevate levels of trust between their nations.

President Xi made it clear that China was committed to protecting the multilateral system that dominates the world by operating within its boundaries, stressing that China would continue to open up its market “to make the world a better open economy.” He also extended an invitation for the European nations to join China’s Belt and Road initiative after Italy became the first G7 nation to join the project. Chancellor Angela Merkel also expressed her desire to “play an active part,” but warned that “that must lead to a certain reciprocity,” which still lacked overall consensus. Mr. Juncker, playing his part, stated that the European Commission’s characterisation that China and Europe were rivals was actually “a compliment describing our shared ambitions.” Mirroring this position, Mr. Xi said “cooperation (between China and the EU) is the defining feature even if there are differences or competition to some extent.

The United States has increasingly adopted a protectionist posture against a number of world powers, including the European Union. Despite the continued security alliances that mark transatlantic relations, the US under Mr. Trump has embraced unilateralism and has isolated European partners. For EU powers, pursuing cooperation under China’s Belt and Road Initiative provides an ideal opportunity to spread risk, boost investment and increase cooperation. Simultaneously, the rivalry characterisation remains to temper expectations of complacency on the EU’s part against what it believes to be a China that preaches a set of ideals, while openly displaying hypocrisies. It serves as the EU’s tool to compel China to not only speak about the ideals it espouses, but also to carry out the same.

President Macron’s invitation to Chancellor Merkel and Mr. Juncker is aimed at achieving a more unified European posture by getting the most powerful nations in the bloc on the same page. Recent events such as Italy’s unilateral participation in the Belt and Road Initiative and the divergence of the Visegrád Group from consolidated EU policy has demanded a display of consensus. Presenting EU policy as unified allows the EU to wield more power to come to the EU-China summit in April. It also displays the EU as a serious entity willing to tackle China’s potential belligerence across the world.

Assessment

Our assessment is that the joint meetings between the leaders of France, Germany, and the EC with China are intended to portray a unified front against a rival who poses a strategic threat and economic opportunities. We believe that the EU will continue to use language intended at keeping Chinese belligerence outside the bloc, while simultaneously engaging in wide-ranging economic participation. We also believe that it is imperative that the EU displays a unified front lest it alienate the US and China - an outcome it must avoid.

Image Courtesy: Ministry of Foreign Affairs of People's Republic of China

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