EUROPEUM Institute for European Policy

  • China has always been a strong supporter of European integration but since the beginning of the relationship in the 1970s, EU-China relations face the challenge of combining principles and pragmatism. In an era of uncertainty, this relationship can be a source of stability.

The origins of this remarkably consistent positioning on the international stage started during the Mao era when the People’s Republic adopted a non-aligned foreign policy quite distinct to that of the Soviet Union. When in June 1975 the UK held its first referendum on membership of the (then) European Economic Community, Chinese diplomats encouraged a YES vote whilst the USSR openly encouraged a NO vote in alliance with left-wingers in the UK. In the same year, the EEC and China established relations at a time when the USSR still refused to recognize the EEC, even arguing that somehow COMECON and the EEC were equivalent bodies of economic cooperation. This same alignment was apparent earlier this year when China was surprised and concerned when BREXIT triumphed.

Similarly, China’s reaction to the election of Donald Trump has been much less optimistic than that of Russia and much more in line with that of the EU. Both the EU and China have an interest in a successful advancement of globalisation and an overwhelming need to avoid trade wars. Both are also committed to the successful implementation of the COP21 climate change agreement. Whilst not sharing the same values, China and the EU are not allies; yet they are not enemies on the road to conflict either. For example, they both support the recent Iran nuclear deal which is now in doubt in Washington.

The 18th EU-China summit took place in Beijing in July 2016, but summits are just the most visible part of a deep structured relationship with ministerial meetings and dialogues between officials on subjects ranging from energy, social security, education, research and indeed human rights. The EU participates in regional fora along with China and the possibility of EU cooperation with the One Belt One Road regional infrastructure development plan is under active consideration. China is contributing to the Juncker programme for investment in jobs and growth in Europe, whereas the EU supported the Chinese initiative for the Asia Infrastructure Investment Bank at a time when the US was pushing a boycott.

A few weeks before the Summit, the EU set out an ambitious agenda to continue the deepening of relations with China. In fact, as Mogherini put it: “The European Union and China already cooperate on so much: we work together on the global and political issues of our times, such as Iran, Syria, Afghanistan, migration and climate change.”

 

The EU is the China’s largest trading partner, while China is the EU’s second largest trading partner after the US. Despite the flourishing trade exchange, issues of fundamental values, such as the arms embargo and the question of Tibet, continue to be conflictual. After the 1989 Tiananmen Square repression, the Europeans imposed an arms embargo. In 2005 HRVP Ashton (the predecessor of Ms Mogherini) floated the idea of ending it. However, it proved to be a divisive issue within the EU. While some Member States, including the Czech Republic, were in favour of this important change of policy, the European Parliament voted against it, keeping the embargo in place. Similarly, in 2008, China refused to participate in the regular EU-China summit in protest at a meeting with the Dalai Lama by French President Sarkozy at the time when France held the rotating Presidency of the European Council. Tibet remains a tricky issue as the recent controversy in the Czech Republic confirms.

There have also been frequent confrontations around concerns of China dumping textiles, solar panels and, most recently, steel products. A very sensitive issue concerning the Market Economy Status of China comes up for decision by the European Commission in mid-December. China insists that it is no longer a state trading country and again, the European Parliament has taken an opposing view. China is likely to get its MES but the EU will also agree on stronger measures against unfair competition

The most ambitious plan is for a deep and comprehensive Free Trade Agreement, but in the short-term progress is being sought on a bilateral investment treaty which puts pressure on China to reassure Europe as to its being an open market economy.

The arrival of President Trump and the likely failure of the US-led regional trade agreements (Transpacific Partnership, or TPP and the Transatlantic Trade and Investment Partnership, or TTIP) which were major geo-economic initiatives of the Obama presidency could well create good conditions for deepening the EU China relationship in the cause of economic growth and cooperative international relations.

In the Trump era, there is every likelihood that EU-China relations will take on an ever more important dimension as an example of what can be achieved in terms of cooperation without either side abandoning its principles.

Geoffrey Harris

 

 

 

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