June 23, 2020
EU-China relations - another Waiting for Godot moment
The EU raised its voice towards China during a six-hour video conference between the two top EU officials and China's premier and president. The EU was more combative and assertive about what it expects from its trading partner. Europe is settling for talks to settle differences, instead of taking a confrontational course like the US. Yet past experiences with China showed that there is hardly any follow-up on talks without some sanctioning power behind them. Will it be different this time?
There has been momentum in Europe to increase its protective shield against a more aggressive China, with a 5G directive, a new regulation on screening of foreign investment, measures to monitor opportunistic purchases into European companies, the recent white paper on foreign state subsidies, and the letter on misinformation, which named China in particular.
But, as China expert Francois Godement points out, the question is how effective all these new policies will be. Will they be binding for member states? Will the implementation of these policies be backed up by means, in particular human resources? Will there be an investment agreement between the EU and China? Maybe, but unlikely this year. The EU said that, to conclude the agreement, it wants to see more ambition from the Chinese side. But Europe itself is caught in the crossfire between the US and China. The upcoming presidential elections risk framing an EU move to compromise with China as unfriendly towards the US, and could be held against Europe. It may thus well be that both sides welcome the postponement of the EU/China summit planned for this October, due to Covid-19.
Will China change its negotiating stance? China is good at promising a compromise and more dialogue. But, in reality, these promises are usually not backed up by actions.
Europe is so far waiting in vain for progress when it comes to lowering barriers to access to Chinese procurement markets. The EU and China may be both keen to keep the WHO alive, but China has so far not made any recommendations in this respect. The same goes for climate change. Europe may remind China of its role as one of the world's biggest economies, yet China's prime minister still lists carbon as one of China's main energy sources.
It is not lack of unity within the EU that is to blame in this case. If anything, unity has been strengthened by the pandemic. But compared with the US, which has effective tools to frustrate Chinese investments that can be implemented with immediate effect, the EU seems toothless. From a Chinese perspective, it is Europe that does not have much else to offer than diplomatic language. Why should China be interested in an agreement that would require them to open up, offering more reciprocity and access by European companies to its procurement markets? The truth is that Europe has no clear and firm strategy towards China, writes Godement. The EU's frank talk about human-rights violations or China's disinformation campaigns is a first step to confront China with its responsibilities. But more needs to be done for this to become effective.