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talkpolitics2019-04-16 08:18 pm
fridi) wrote in talkpolitics2019-04-16 08:18 pm
Entry tags:
- china,
- eu,
- geopolitics,
- trade
No more naivety
For a long time, the EU believed (hoped?) China was the new Japan, but for some "minor" human rights problems. Now the Europeans must have started realizing that they've got not just a new huge economic partner on their hands, but a strategically active, inherently authoritarian superpower.
EU leaders call for end to 'naivety' in relations with China
Macron has a point. He made this point a centerpoint of his statement at the EU-China summit earlier this month. The end of naivety, a European waking up, he called it. This was the first voicing of a realization that's been described in a recent strategic document by the European Commission, painting China as an economic rival striving for technological leadership, as well as a systematic rival that promotes alternative models of governance that are by definition alien to the European one. There were some suggestions in that document as well, like amending EU legislation in a number of fields - from public contracts to personal data protection, to anti-trust law, to communications and the industrial strategy on the development of AI. There's an impression that the EU is fundamentally re-thinking its approach to China, and the shift is so noticeable that even experienced Asian observers tend to describe it as a revolution of some sorts.
This newly acquired firmness on EU's part was felt by Chinese prime minister Li Keqiang during his meeting with European Commission chairman Donald Tusk and European Council president Juncker. Keqiang promised that the European companies would not be forced to share technologies and sensitive information while working in China with local private partners. He pledged to work on an investment agreement between the two sides, which is considered a major condition for improving the access of European companies to the Chinese market and facilitating the trade of shares in Chinese companues by European investors. Work's been going on since 2013 on such an agreement, and though there's little progress there, hopes are that it'll be finalized by next year.
Tusk presented these commitments as a victory, along with another breakthrough. For the first time China has agreed to work with the EU on reforming the WTO rules about the industrial subsidies. The EU considers the WTO a key to handling the Chinese "state capitalism" model, which is naturally seen by the West as harmful to the world trade order.
As is always the case with China, the question is when and whether the promises will have a follow-up in actions. Still, for the EU this was a fine example that soft power could occasionally firmen up if need be. No one expects the European leaders to adopt an aggressive rhetoric in Trump's or Pence's style (Pence directly attacked China on all accounts last year, coming just short of announcing the start of a new Cold War). But the EU is already figuring out that the challenge from the Asian supergiant requires a re-adjustment of the European policies, and the era of a unilateral opening up to China is at end.
There are political and strategic developments at play here too, like the ramping up of authoritarianism and government intervention in the economy under Xi Jinping, as well as China's attempts to increase their influence in Europe (the New Silk Road project). But the strongest engine of these changes is the economy. The EU has lost hope that China would reform itself and open its market, and it's concerned of the progress of China's state-supported companies in sectors that Europe considers critically important for its own economic future and security.
One of the first red lights was the purchase of Bavarian company Kuka, the pearl of the German robotics sector, by Chinese company Midea back in 2016. The reversed, a Germany company buying off a Chinese one, would be impossible at this point. After this case, the German government started looking for ways to protect key companies from Chinese takeover. The EU now has a system of surveying foreign acquisitions, which is tacitly directed at China. The tightening of this system has yielded first results as well: after the 2016 peak, when Chinese acquisitions in the EU increased by 40%, now they've plummeted. France and Germany are digging up the idea of an all-European industrial policy just now, heading toward the creation of "European champions" that would challenge their Chinese (and US) giant counterparts.
The main concern is that this EU awakening is coming too late, and the current lack of unified strategy has already allowed China to acquire tools for influencing a number of European countries. The latest example os Italy's joining the Chinese project of the New Silk Road, which is China's long-time plan for a new global order with China at its top. There are a number of sister initiatives, all of them Chinese-inspired, like 16+1, involving East European countries (11 of them EU members). In fact, after meeting with the EU dignitaries in Brussels, the Chinese prime minister immediately flew off to Croatia for the annual 16+1 summit. China's success in the divide and rule game has become patently apparent, now that both Greece and Hungary (both enjoying significant Chinese investment at a dire economic time) have moved ahead and blocked important decisions in the EU concerning China. This is just a taste of China's game, and it is only just starting.
Now that the EU has started sharing many of America's concerns about China, even if they don't agree with Trump's aggressive approach, it would be natural if Europe and the US start working together to push back against China. Except, Trump now considers the EU a rival too, "even worse than China". Just as Li Keqiang was visiting Brussels, Trump threatened to slap tariffs worth 11 billion dollars on EU goods because of the subsidies for Airbus. There's still a risk that the US could hit the EU car-makers, too. China, on the other hand, despite some recent conflicts, is trying to look attractive for the European businesses as far as trade and investment are concerned. China is using honey, smiles and promises, while the US is using tar and vinegar. Thus, the US is inadvertently pushing Europe toward China - or at least significant parts of it. And toward Russia, maybe.
The EU leaders are afraid both of a possible war with the US and China, and by the prospect of Trump striking a deal with Xi, which would put the European industry in a very bad place, economically. The EU is threatened of becoming a battlefield between America and China, bearing the bulk of the consequences of that rivalry while the two are using various parts of it as proxies and Guinea pigs in their fight for geostrategic supremacy. So Europe has no other choice but to be united, if it were ever to stand a chance of surviving.
EU leaders call for end to 'naivety' in relations with China
Macron has a point. He made this point a centerpoint of his statement at the EU-China summit earlier this month. The end of naivety, a European waking up, he called it. This was the first voicing of a realization that's been described in a recent strategic document by the European Commission, painting China as an economic rival striving for technological leadership, as well as a systematic rival that promotes alternative models of governance that are by definition alien to the European one. There were some suggestions in that document as well, like amending EU legislation in a number of fields - from public contracts to personal data protection, to anti-trust law, to communications and the industrial strategy on the development of AI. There's an impression that the EU is fundamentally re-thinking its approach to China, and the shift is so noticeable that even experienced Asian observers tend to describe it as a revolution of some sorts.
This newly acquired firmness on EU's part was felt by Chinese prime minister Li Keqiang during his meeting with European Commission chairman Donald Tusk and European Council president Juncker. Keqiang promised that the European companies would not be forced to share technologies and sensitive information while working in China with local private partners. He pledged to work on an investment agreement between the two sides, which is considered a major condition for improving the access of European companies to the Chinese market and facilitating the trade of shares in Chinese companues by European investors. Work's been going on since 2013 on such an agreement, and though there's little progress there, hopes are that it'll be finalized by next year.
Tusk presented these commitments as a victory, along with another breakthrough. For the first time China has agreed to work with the EU on reforming the WTO rules about the industrial subsidies. The EU considers the WTO a key to handling the Chinese "state capitalism" model, which is naturally seen by the West as harmful to the world trade order.
As is always the case with China, the question is when and whether the promises will have a follow-up in actions. Still, for the EU this was a fine example that soft power could occasionally firmen up if need be. No one expects the European leaders to adopt an aggressive rhetoric in Trump's or Pence's style (Pence directly attacked China on all accounts last year, coming just short of announcing the start of a new Cold War). But the EU is already figuring out that the challenge from the Asian supergiant requires a re-adjustment of the European policies, and the era of a unilateral opening up to China is at end.
There are political and strategic developments at play here too, like the ramping up of authoritarianism and government intervention in the economy under Xi Jinping, as well as China's attempts to increase their influence in Europe (the New Silk Road project). But the strongest engine of these changes is the economy. The EU has lost hope that China would reform itself and open its market, and it's concerned of the progress of China's state-supported companies in sectors that Europe considers critically important for its own economic future and security.
One of the first red lights was the purchase of Bavarian company Kuka, the pearl of the German robotics sector, by Chinese company Midea back in 2016. The reversed, a Germany company buying off a Chinese one, would be impossible at this point. After this case, the German government started looking for ways to protect key companies from Chinese takeover. The EU now has a system of surveying foreign acquisitions, which is tacitly directed at China. The tightening of this system has yielded first results as well: after the 2016 peak, when Chinese acquisitions in the EU increased by 40%, now they've plummeted. France and Germany are digging up the idea of an all-European industrial policy just now, heading toward the creation of "European champions" that would challenge their Chinese (and US) giant counterparts.
The main concern is that this EU awakening is coming too late, and the current lack of unified strategy has already allowed China to acquire tools for influencing a number of European countries. The latest example os Italy's joining the Chinese project of the New Silk Road, which is China's long-time plan for a new global order with China at its top. There are a number of sister initiatives, all of them Chinese-inspired, like 16+1, involving East European countries (11 of them EU members). In fact, after meeting with the EU dignitaries in Brussels, the Chinese prime minister immediately flew off to Croatia for the annual 16+1 summit. China's success in the divide and rule game has become patently apparent, now that both Greece and Hungary (both enjoying significant Chinese investment at a dire economic time) have moved ahead and blocked important decisions in the EU concerning China. This is just a taste of China's game, and it is only just starting.
Now that the EU has started sharing many of America's concerns about China, even if they don't agree with Trump's aggressive approach, it would be natural if Europe and the US start working together to push back against China. Except, Trump now considers the EU a rival too, "even worse than China". Just as Li Keqiang was visiting Brussels, Trump threatened to slap tariffs worth 11 billion dollars on EU goods because of the subsidies for Airbus. There's still a risk that the US could hit the EU car-makers, too. China, on the other hand, despite some recent conflicts, is trying to look attractive for the European businesses as far as trade and investment are concerned. China is using honey, smiles and promises, while the US is using tar and vinegar. Thus, the US is inadvertently pushing Europe toward China - or at least significant parts of it. And toward Russia, maybe.
The EU leaders are afraid both of a possible war with the US and China, and by the prospect of Trump striking a deal with Xi, which would put the European industry in a very bad place, economically. The EU is threatened of becoming a battlefield between America and China, bearing the bulk of the consequences of that rivalry while the two are using various parts of it as proxies and Guinea pigs in their fight for geostrategic supremacy. So Europe has no other choice but to be united, if it were ever to stand a chance of surviving.