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Foreign Policy

Europe Faces Historic Choices After Xi’s Visit

May 17, 2024
  • Warwick Powell

    Adjunct Professor at Queensland University of Technology, Senior Fellow at Beijing Taihe Institute

Europe — as a geopolitical construct of relatively recent provenance — is under stress. The threads of its political economy and security architecture are unraveling. The European Union project bore the hallmarks of colonialism from its inception, as Peo Hansen and Stefan Johnsson, both professors at Sweden's Linkoping University, have argued.

It was more than an economic project from the beginning. Rather, it was a geopolitical project in the years after World War II, during which decolonialism was unfolding across the globe. The aspirations and mythologies of civilizational virtuosity that underpinned the European post-colonial project are now unraveling in the face of an unyielding “sacramental order.”

The recent visit by China’s President Xi Jinping to Paris, Belgrade and Budapest has shined a light on the plight of the European project as a geopolitical and political-economic institution. It exposed the vacuity of Josep Borrell’s call, in October for the EU to be treated as a geopolitical power in its own right.

In Paris recently, Ursula von der Leyen sang from Washington’s hymn sheet about China’s so-called overcapacity. She spoke of waves of Chinese-made vehicles flooding the markets of Europe. All the while, the European Automobile Manufacturers’ Association provided data that showed Chinese EV brands claiming a market share of 6.4 percent in 2023. The ACEA report also showed that European carmakers experienced a trade surplus of 90 billion euros, relatively consistent with the previous year, on the back of rising production. Little wonder that Olive Zipse, chairman of BMW Group, has warned that fears of competition from Chinese EV carmakers are overblown. In fact, he went so far as to say that “it is certainly not true that Europe is currently being swamped with Chinese products.”

French President Emmanuel Macron demurred on the overcapacity claims as well, perhaps emblematic of a fracture in the attitudes of the French and the Germans toward competition. Nonetheless, he found enough autonomy in the Brussels-Washington united front to issue a joint statement with the Chinese leader on the situation in the Middle East.

While Von der Leyen bloviated, Europe’s alternative path became clearer as Xi landed in Serbia and then Budapest.

In recent years, Hungary has sought to capitalize on the industrialiation potential of working with China’s EV leader, BYD. Not to be outdone, Barcelona’s old Nissan plant (which was shuttered in 2021) is being refurbished for EV production in a joint venture between Spanish firm EV Motors and China’s Chery. Even Italy’s government is reported to have reached out to BYD expressing interest in setting up a factory.

Serbia is also reaping economic benefits from collaboration with China. Less than 200 kilometers from the BYD factory in Szeged, Hungary, we have the Linglong rubber tire plant in Zrenjanin, Serbia. An automotive cluster could be emerging that straddles these two nations. Hungary is an EU member state; Serbia is not. This in/out configuration offers potential advantages to investors seeking to optimize opportunity and manage risks.

The best green energy transition is one implemented at the least cost and greatest pace. In Europe, this can only be achieved through the importation of renewable energy technologies and hardware manufactured in China. Renewable energy also offers the potential to increase energy sovereignty while reducing costs.

Nations within the EU and on its periphery are finding that their interests and outlooks are increasingly out of step with those of the technocratic elite in Brussels. The Eurozone economy has entered a perilous economic state, exacerbated by the energy shock and supply chain disruptions occasioned by Russia’s entry into Ukraine in early 2022. De-industrialisation in core Eurozone economies is the reality today, while European economies are more dependent on the United States for energy than ever before. This is a case of jumping out of the pot into the fire, as the issue of energy security and sovereignty remains unresolved.

The hardships are self-inflicted. The security architecture of Europe writ large after the dissolution of the Soviet Union in 1991 saw a progressive expansion of NATO eastward. Russia’s unease, evinced first in Munich in 2007, was ignored. Agreements to stabilize the security architecture around the flashpoint of Ukraine were undermined by the insincerity of the Germans and the French, co-signatories that have made it known since that the non-Russian signatories to the Minsk agreements had no intention of enforcing their terms. Rather, they were just buying time to arm and train Ukraine.

The unfolding military debacle and human tragedy in Ukraine, and the associated energy crisis that Europe’s sanctions caused (not to mention the sabotage of the Nord Stream gas pipeline), can be traced back to the disingenuous failure of the transatlantic elites to resolve a post-Cold War security architecture that didn’t work for all concerned.

European nations now have some clear, albeit challenging, decisions to make:

Does an EU, as it is configured today, with an orientation focused principally on Washington, make sense for individual member states? Are the interests of the Washington-Brussels axis consistent with the interests of European nations and their peoples? As the Eurasian continent continues to integrate economically and align its overarching security architecture via multilateral institutions such as the Shanghai Cooperation Organisation, do the countries of Europe see their future as the continental tail end of transatlantic priorities or as the western bulwark of Eurasia?

Xi’s visit brings these questions into sharp relief. 

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