China Trends #5 - EU-China: A Fairly Smooth Road Ahead

Author

China analyst, former Research Fellow, Institut Montaigne’s Asia Program

"For the advancement of human progress, China and the EU must remain each other's comprehensive strategic partners and not become systemic rivals. Our interaction should be a positive cycle that enables our mutual success, not a knock-out match which results in only one winner", said Wang Yi, China’s foreign minister during a press conference on May 24, 2020.¹ The call for a positive relationship is not new, as it was also emphasized by Wang Yi back in December 2019, after a meeting with Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy.² As 2020 marks 45 years of diplomatic ties between China and Europe, and the first year of a new team at the European Union, it is seen as an important year for the relationship. The press release published by EEAS on the meeting also emphasized the importance of 2020 as a "milestone in relations between China and the European Union". But the mention of advancement of friendship and cooperation was followed by "subjects on which we do not always agree"³, giving a less positive view of the status of cooperation.

Three major summits were on the 2020 agenda: the China-Central and Eastern European Countries Summit, the 22nd EU-China Summit, and a special Leipzig EU-China Summit. However, due to the COVID-19 outbreak, the EU and China had to reshape this agenda. Facing a critical test, where are EU-China relations heading?

Steady improvement with some unavoidable conflicts

The Chinese perceptions of EU-China relations can be divided into two periods: pre- and post- COVID-19 crisis. The positive outlook presented by Wang Yi in the end of 2019 is based on an analysis of the relations at the time: the 21st EU-China Summit led to a joint statement; the 16+1 mechanism was enlarged to include Greece; the EU and China signed two aviation agreements and the geographical indications agreement.

The Chinese perceptions of EU-China relations can be divided into two periods: pre- and post- COVID-19 crisis.

According to a Blue Book annual report published by the Chinese Academy of Social Sciences in December 2019, EU-China relations show a steady trend of improvement (稳中向好).⁴ It emphasizes that EU-China cooperation has a solid foundation, and their cooperation mechanisms are becoming increasingly mature. In addition, it describes China’s EU policy as highly consistent, contributing to the stability of EU-China relations.

Geng Shuang, Spokesperson for the Foreign ministry, outlines three key constant points (三个"始终如一"): China’s attitude towards EU and its support of European integration; its determination to promote EU-China pragmatic cooperation; and its commitment to defend multilateralism along with the EU.⁵

However, other developments in the relationship are also acknowledged by Chinese experts. For instance, the EU’s Strategic Communication on China issued in March 2019 raised alarm bells in Beijing. The document explained that the balance of challenges and opportunities had shifted, describing China as both a cooperation partner, an economic competitor, and a systemic rival. Wang Yiming, Researcher at Renmin University, attributes the change to two factors.⁶He argues that traditionally, globalization works well because there was a stable US-Europe-China triangle, with all the three major forces fulfilling their respective roles: the United States as the innovator, Europe as the regulator, and China as the executor. However, current conflicts between the US and China are transforming the triangle, pressuring the EU to adjust its perception of China. This is an unwelcome change for China: Wang Yiming associates it with a European push for a more assertive Europe. Moreover, he suggests that the process of European integration is slowing down while that of Asian integration is accelerating. This has also directly impacted the level of integration of their respective value chain, widening the gap between them, putting the EU at a disadvantage and leading to increasing EU complaints against China.

These conflicts and frictions are normal, given the historical and development level differences, explains Zhang Ming, Ambassador of China to the EU. He adds that the upcoming high-level summits would provide more incentives for cooperation and draw a blueprint for the next five years.⁷ Yang Fengmin, Director of the European Institute at East China University of Science and Technology, writes that since the EU has no intention to become a global hegemon and has to deal with its internal problems, there are no serious political obstacles between EU and China.⁸

Overall, most Chinese comments put a positive spin on the EU-China relationship. They should continue to defend together multilateralism, free trade and cooperation on environmental issues.

Enforcing the friendship during and after the pandemic

The COVID-19 pandemic has put on hold this initial agenda. The EU-China Summit and the 17+1 Summit have been postponed, while the special EU-China "Leaders Meeting" faces doubts about its necessity and usefulness. As Chinese policymakers and experts often attach symbolic meaning to official dialogues and exchanges, the postponement and possibility of cancellation could prove harmful to the EU-China relations.

Overall, most Chinese comments put a positive spin on the EU-China relationship.

This could explain the constant emphasis on communication and on medical supply deliveries between China and the EU Member States. "A true friend is known in the day of adversity (患难见真情)"⁹, and therefore the delivery of medical supplies from China to the rest of the world is supposed to enforce the friendship of China with the respective country or area. Public health, previously a less discussed topic, has thus been included as an area of cooperation between China and the EU. However, actual cooperation seems to have remained on the level of phone call exchanges between leaders and delivery of medical supplies. The "Health Silk Road" is seen more as a way to revive the existing Belt and Road Initiative instead of a form of cooperation. The Chinese effort, often referred to as "mask diplomacy", has received mixed responses in Europe, with some European leaders praising China’s support and others questioning the quality of the supplies as well as the political intention behind it.

In a much more realist direction, Feng Zhongping, Vice President of the China Institutes of Contemporary International Relations (CICIR) explains that the crisis has made the European Union realize how powerless it is internationally in spite of its intentions (有心无力).¹⁰He expects that as a result, the EU will be forced to adapt "flexible integration (灵活的一体化)" and be more realistic and pragmatic with its internal and external policies. The crisis has also highlighted the dependency issue of medical supplies on China, leading to a wider discussion on overall supply dependency. In other words, the COVID-19 crisis is both an opportunity and a challenge to EU-China relations. According to this assessment, having a more pragmatic EU also means having a more China friendly EU, due to the reliance on the economic benefits China could bring. But the increasing debate about the dependency issue is a negative variable in the bilateral relations.

In May 2020, the Chinese Academy of Social Sciences published a report on international trends.¹¹ It argues that against the backdrop of the epidemic affecting international relations, it is in the interest of both sides to maintain a good and stable Sino-European relations. The interest of China and the EU are now interconnected, and the two rise and fall together (一荣俱荣一损俱损). It means that China does not want a U-turn or even a setback in the Sino-European relations. Cui Hongjian, Director of European Studies at the China Institute of International Studies (CIIS), also predicts that the European Union will be "looking East (向东看)" after the pandemic and aim to strengthen EU-China cooperation.¹²

But it means that China could also be facing a more demanding and politically tougher EU, which aims to redefine its relationship with China.

But it means that China could also be facing a more demanding and politically tougher EU, which aims to redefine its relationship with China. The US factor will continue to influence the EU-China relationship, but Cui Hongjian believes in increased EU assertiveness of its strategic autonomy post-COVID, attempting to find its place in the competition between China and the United States instead of picking a side.

Moving towards economic recovery

Most of the Chinese analyses about the future of EU-China relations concentrate on their economic component. This is because the outbreak has had a severe impact on the global economy and caused an economic slowdown. For instance, lockdowns and confinements aiming to contain the spread of virus have caused stagnation of manufacturing and transport sectors. Economic losses are visible. Huang Ping, Executive President of the Chinese Institute of Hong Kong at CASS, argues that as the crisis has accelerated the decline of the European economy. European countries have to remain rational and pragmatic when dealing with China, and cooperation is Europe’s best option.¹³ China and Europe should further explore ways and means towards working together in a competitive environment. However, in an earlier publication, he mentioned his concern over the EU demand for a reciprocal relationship, doubting the possibility of such a relationship given the difference in development level between the two sides.¹⁴ Both Cui Hongjian and Huang Ping think that EU-China relations are facing a crucial test (大考). They both point to increasing interdependence and cooperation between China and the EU accompanied by the inevitability of conflicts and competition.

Some Chinese experts go further, arguing that China is indispensable for the EU’s economic recovery, making it impossible for the EU to shift away from China. Zhang Jian, Director of the Institute of European Studies of CICIR, believes that China and Europe could only overcome their economic difficulties through cooperation, and such cooperation would be a win-win model for the rest of the world to follow.¹⁵ Zhou Hong, Director General of the Academic Division of International Studies at the Chinese Academy of Social Sciences, points out that while there is political demand and public opinion support in Europe for the relocalization of production lines to the Eurozone, large-scale industrial restructuring is time-consuming and uneconomical.¹⁶ Given the current context, state intervention in industrial restructuring for the sake of "security" might be possible. But the market will prevail at a later stage because the Chinese market holds an irresistible attraction for European companies. Tang Zheng, Vice President of the China - Europe Association for Technical and Economic Cooperation, suggests that China could increase trade with Europe to facilitate the economic and industrial recovery of European countries.¹⁷ For example, China could promote greater trade cooperation with the European auto industry, which has suffered heavy losses in the pandemic.

To conclude, despite several changes in the EU-China relations caused by internal and external factors in the past year, Chinese experts continue to argue that there are many points of agreement between EU and China. This includes support of globalization, multilateralism, and environmental protection. Economic cooperation again has the upper hand. It was always significant for EU-China relations in the past, and it has now become indispensable due to the need for an economic recovery after the pandemic. There also seems to be a consensus among all Chinese experts mentioned in this paper on the presence of an element of competition in EU-China relations. However, competition and cooperation can co-exist, and in the case of EU-China relations, many experts suggest that cooperation would have a heavier weight than competition. In short, competition between EU and China will continue to exist as it is inevitable, but the two will also continue to cooperate as it is necessary.

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¹"State Councilor and Foreign Minister Wang Yi Meets the Press", Ministry of Foreign Affairs of the People’s Republic of China, 24 May 2020, https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1782262.shtml
²"Wang Yi: The China-EU relations are standing at a new historical starting point (王毅：中欧关系已站在新的历史起点上)", Xinhua, 16 December 2019,http://www.xinhuanet.com/world/2019-12/16/c_1125349884.htm
³"China: press statement following the bilateral meeting between HR / VP Josep Borrell and Minister of Foreign Affairs of China Wang Yi", EEAS, 16 December 2019, https://eeas.europa.eu/headquarters/headquarters-homepage/72140/chine-d %C3 %A9claration- %C3 %A0-la-presse-suite- %C3 %A0-la-r %C3 %A9union-bilat %C3 %A9rale-entre-le-hrvp-josep-borrell-et-le_fr
⁴"China-Europe relations are generally stable and improving, and we are building a community of shared destiny (中欧关系总体稳中向好共同构建人类命运共同体)", Xinhua, 19 December 2019, http://www.xinhuanet.com/world/2019-1/19/c_1210402089.htm
⁵"Foreign Ministry talks about Wang Yi's trip to Europe: Communicating the Three ‘Consistencies’ of China-EU Relations (外交部谈王毅欧洲之行：传递发展中欧关系的三个’始终如一)’", The Paper, 18 December 2019, https://www.thepaper.cn/newsDetail_forward_5272690
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⁷"Interview of Ambassador Zhang Ming, Head of Mission to the European Union, by China Youth Daily on China-EU relations (驻欧盟使团团长张明大使就中欧关系接受《中国青年报》专访)", Mission of the People’s Republic of China to the European Union, 06 January 2020, http://www.chinamission.be/chn/stxw/t1731626.htm
⁸"Scholars Roundtable - Where is the EU heading? Which way is the Sino-European relationship heading? (学者圆桌 | 欧盟向何处去？未来的中欧关系怎么走？)", Shanghai Observer, 07 November 2019, https://www.shobserver.com/news/detail?id=187077
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¹¹"CASS report predicts eight global trends for 2020, the Covid-19 crisis is the biggest uncertainty (科院报告预测2020年全球形势八大趋势新冠疫情成最大不确定因素)", China Council for the Promotion of International Trade, 13 May 2020, http://www.ccpit.org/Contents/Channel_4114/2020/0513/1260327/content_1260327.htm
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¹³ibid
¹⁴Huang Ping, "An uncertain Europe? Certain China-EU relations? (不确定的欧洲？确定的中欧关系？)", Aisixiang, 03 September 2019, http://www.aisixiang.com/data/118022-2.html
¹⁵Zhang Jian, "Unprecedented urgency of Sino-European cooperation (中欧合作的紧迫性前所未有)", China Daily, 12 May 2020, https://cn.chinadaily.com.cn/a/202005/12/WS5eba60efa310eec9c72b865d.html
¹⁶Zhou Hong, "Europe and EU-China relations in the context of the epidemic (疫情下的欧洲与中欧关系)", Aisixiang, 21 April 2020, http://www.aisixiang.com/data/120968.html
¹⁷"Experts: the epidemic does not change the resilience of China-EU economic and trade relations (专家：疫情不改中欧经贸关系韧性)", China News, 11 April 2020, http://www.chinanews.com/cj/2020/04-11/9153819.shtml