China Plans Visits to Europe in Times of Uncertainty

Paris and Rome – or Rome and then Paris? – is perhaps not as spectacular an itinerary as Xi Jinping’s trip from Riyadh to Tehran (via Cairo…) in 2016. Still, the two European capitals have never been more at loggerheads with each other. President Macron and Italy’s governing duet make no bones about the fact that the coming European election will be a choice between the two camps. Should a hard Brexit be nearing, Mr Macron will have to deal with the emergency, while Di Maio and Salvini will take advantage of the situation to defy the European Union. Italy’s recent sabotage of a European Council resolution regarding Venezuela, that just so happens to coincide with the stance taken by China and a handful of other authoritarian states, is a clear indication of Salvini’s willingness to step up his game.
 
As to the EU-China summit, it will be fighting adverse trends.

• First, there is no reason for China, given that it has refused the structural changes required by the Trump administration, to grant any changes to the European Union. The latter is far less threatening to China, not because it trades less, but because it does not leverage as effectively as the United States. And a month and a half-long interval is clearly not sufficient to negotiate comprehensive agreements from a cold start. Recently, China has put forward new proposals for the long-stalled bilateral investment agreement, suggesting a multi-step calendar that essentially postpones most changes coming from the Chinese side. In its speeches, China has mastered the art of unsubstantial proposals, where the language it uses to declare agreements conceals a significant lack of concrete content.
   
• Second, the incentive for Italy’s ruling coalition to show voters that it can tough it out with the Commission and defy liberals from the European establishment, encourages it to sign on to China’s proposals. The first is a memorandum of understanding (MOU) on the Belt & Road Initiative (BRI), which was also signed by some other countries (most recently, by Portugal). Looking for decisions about investments in public infrastructures with cash up front, or simply, for some, purchases of Italy’s public debt, could both be extremely helpful to this government, and would also represent a significant electoral argument. Conversely, Emmanuel Macron and his pro-European and reforms platform, while they are not a losing proposition, could do without further difficulties, including without the easy accusation that he is "mismanaging China", and failing to grasp the golden opportunities offered by the Silk Road.

 
The same can be said of the outgoing Commission – although, as we have just found out in the Alstom-Siemens case, Commissioners at this stage find it easier to say no than to start new initiatives. It has recently posed several challenges to China. One of them is the request that Member States put an end to so-called golden visas. Indeed, these provide easy public (and occasionally private) money, often for those who are precisely most prone to accommodating Beijing on many grounds (e.g. Portugal, Hungary, Cyprus, Estonia). The Commission and the Council will have to watch over their shoulders to ensure that the ensuing 16+1 summit does not unravel the consensus that the EU can still muster in its own summit with China.
 
In short, these Chinese visits reveal a strategic and well-planned agenda, at a moment when Chinese leaders can probe their European’s partners' weaknesses. Can these tactics reverse China’s recent strategic losses? Does China even think it has suffered any losses? The almost complete lack of open controversy around Europe’s new investment screening directive shows that for the time being, China sees it as a paper tiger. The latter’s implementation through national decisions will decide whether this is a real change of scenery for foreign investment in critical sectors. Xi Jinping’s visits relentlessly push the BRI narrative. Huawei’s marketing and public affairs discourse around 5G and "smart cities", advertised as having "360 degree knowledge of what goes on", has not ceased.

In the longer term, the situation will depend on the outcome of the European elections and the coherence between views held by key Member States, starting with France and Germany. A defensive agenda on issues going from trade to investment, to technology phishing and influence peddling must certainly be maintained with consistency. Yet it will not replace the much-needed positive agenda encompassing more support for innovation and funding to European tech firms, and the unification of European rules in the areas where non-European firms seem to thrive on the fragmentation of their European would-be competitors.
 
Let’s face it: China’s inroads and successes do not exclusively rely on unfair support and influence peddling. Its dynamism, the bets it has placed on geo-economics and its industrial policies should not be disregarded. It’s not enough for Europe to be a unified space for people and goods. Europe should also move to forward-looking policies.