Trump's European Gift to China

While Donald Trump and Vladimir Putin were meeting in Helsinki last month, another summit was taking place in Beijing: the 20th China-EU Summit, in the presence of Chinese Premier Li Keqiang and Presidents Jean Claude Juncker (European Commission) and Donald Tusk (European Council).

The meeting came at a time when the Sino-European relationship is becoming even more important. For China, it is a question of finding new allies in the face of a U.S. Administration determined to pursue a “trade war”, particularly against Chinese products. Before Juncker actually visited Donald Trump a few days ago (and “agreed to discuss free trade” with Washington), Europeans were also targeted. 

Still, the EU-China summit was an ideal time to orchestrate a diplomatic warm-up. Beijing and Brussels agreed to work together on improving "international governance" and condemned trade sanctions, while pledging to defend the Paris Climate Agreement and the Iran nuclear deal, and even mentioned a will to collaborate on a possible bilateral investment treaty (BIT).

A BIT is badly lacking: on one hand, European investments to China are in free fall (€8 billion in 2017); on the other hand, Chinese companies are on an acquisition spree in Europe (€35 billion).

This year, China and the EU did better than 2017 at their summit by issuing a long joint communiqué that can be interpreted as expressing dissatisfaction with the United States. As Washington expresses its skepticism towards the World Trade Organization, China has succeeded in convincing Brussels to participate in the creation of a working group to modernize the WTO. Chinese and European leaders also mentioned market access, the main stumbling block between them for several years.

Beijing’s Charm offensive 

China's goal is to find allies while it is facing its one-on-one with Trump’s America. But Beijing also has other goals such as improving its own image in European countries. In Germany and France in particular, a wind of criticism started blowing since 2017 following a wave of Chinese acquisitions in infrastructure and high technology sectors. A plan to start screening foreign direct investment is, for example, being adopted within the European institutions, while the European Chamber of Commerce in China has been critical Beijing for the lack of market access.

Hence Beijing’s charm offensive vis a vis Europe. As a handful of commentators, especially in France, seem to suggest that Europe should get closer to China at America’s expense, it is worth asking if Europeans and Chinese actually share the same values, while Westerners across the Atlantic no longer have anything in common. Nothing is less certain. Using summit diplomacy to obtain concessions is one thing, marrying a regime led by a single party with no democratic tradition is another. Chancellor Angela Merkel, who regularly raises the issue of human rights with her Chinese counterparts, was not mistaken. As for Emmanuel Macron's teams, they are engaged in a long-lasting exchange on China’s power with American counterparts, be it Treasury, State Department or Pentagon. The game therefore remains open.